Registration No. 33-33799
File No. 811-6001
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
PRE-EFFECTIVE AMENDMENT NO. ___ / /
POST-EFFECTIVE AMENDMENT NO. 10 / X /
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / X /
Amendment No. 12 / X /
OPPENHEIMER GLOBAL GROWTH & INCOME FUND
- -----------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Two World Trade Center, New York, New York 10048-0203
- -----------------------------------------------------------------------
(Address of Principal Executive Offices)
212-323-0200
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(Registrant's Telephone Number)
ANDREW J. DONOHUE, ESQ.
Oppenheimer Management Corporation
Two World Trade Center, New York, New York 10048-0203
- -----------------------------------------------------------------------
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check
appropriate box):
/ / Immediately upon filing pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(1)
/ / 75 days after filing pursuant to paragraph (a)(2)
/ X / On October 10, 1995, pursuant to paragraph (b)
/ / On ______________, pursuant to paragraph (a)(1)
/ / On ______________, pursuant to paragraph (a)(2) of Rule 485.
- -----------------------------------------------------------------------
The Registrant has registered an indefinite number of its shares under the
Securities Act of 1933 pursuant to Rule 24f-2 promulgated under the
Investment Company Act of 1940. A Rule 24f-2 Notice for the Registrant's
fiscal year ended September 30, 1994 was filed on November 29, 1994.
<PAGE>
FORM N-1A
OPPENHEIMER GLOBAL GROWTH & INCOME FUND
Cross Reference Sheet
Part A of
Form N-1A
Item No. Prospectus Heading
- --------- ------------------
1 Front Cover Page
2 Expenses; A Brief Overview of the Fund
3 Financial Highlights; Performance of the Fund
4 Front Cover Page; How the Fund is Managed--Organization and
History; Investment Objective and Policies
5 How the Fund is Managed; Expenses; Back Cover
5A Performance of the Fund
6 How the Fund is Managed--Organization and History-- The Transfer
Agent; Dividends, Capital Gains and Taxes; Investment Objective
and Policies--Portfolio Turnover
7 Shareholder Account Rules and Policies; How Buy Shares; How to
Exchange Shares; Special Investor Services; Service Plan for
Class A Shares; Distribution and Service Plan for Class B
Shares; Distribution and Service Plan for Class C Shares; How
to Sell Shares
8 How to Sell Shares; Special Investor Services
9 *
Part B of
Form N-1A
Item No. Heading In Statement of Additional Information
- --------- ----------------------------------------------
10 Cover Page
11 Cover Page
12 *
13 Investment Objective and Policies; Other Investment Techniques
and Strategies; Additional Investment Restrictions
14 How the Fund is Managed - Trustees and Officers of the Fund
15 How the Fund is Managed - Major Shareholders
16 How the Fund is Managed; Distribution and Service Plans
17 Brokerage Policies of the Fund
18 Additional Information About the Fund
19 Your Investment Account - How to Buy Shares; How to Sell Shares;
How to Exchange Shares
20 Dividends, Capital Gains and Taxes
21 How the Fund is Managed; Brokerage Policies of the Fund
22 Performance of the Fund
23 *
- ----------------
* Not applicable or negative answer.
<PAGE>
OPPENHEIMER GLOBAL GROWTH &
INCOME FUND
Prospectus dated October 10, 1995
Oppenheimer Global Growth & Income Fund (the "Fund") is a mutual fund
with the investment objective of seeking capital appreciation consistent
with preservation of principal while providing current income. The Fund
may invest in common stocks, convertible securities and fixed income
securities. It may emphasize one or more of those types of securities at
any one time, or invest in a combination of them, depending on market
conditions. The Fund will normally invest in at least four countries
(including the United States) and expects to invest a substantial amount
of its assets in foreign securities. The Fund may also write covered
calls and use certain hedging instruments. The Fund is not intended for
investors whose principal objective is assured income.
Some investment techniques the Fund uses may be considered to be
speculative investment methods that may increase the risks of investing
in the Fund and may also increase the Fund's operating costs. You should
carefully review the risks associated with an investment in the Fund.
Please refer to "Investment Objective and Policies" for more information
about the types of securities the Fund invests in, its investment methods
and the risks of investing in the Fund.
This Prospectus explains concisely what you should know before
investing in the Fund. Please read this Prospectus carefully and keep it
for future reference. You can find more detailed information about the
Fund in the October 10, 1995 Statement of Additional Information. For a
free copy, call Oppenheimer Shareholder Services, the Fund's Transfer
Agent, at 1-800-525-7048, or write to the Transfer Agent at the address
on the back cover. The Statement of Additional Information has been filed
with the Securities and Exchange Commission and is incorporated into this
Prospectus by reference (which means that it is legally part of this
Prospectus).
(OppenheimerFunds logo)
Shares of the Fund are not deposits or obligations of any bank, are not
guaranteed by any bank, and are not insured by the F.D.I.C. or any other
agency, and involve investment risks, including the possible loss of the
principal amount invested.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
Contents
ABOUT THE FUND
Expenses
A Brief Overview of the Fund
Financial Highlights
Investment Objective and Policies
How the Fund is Managed
Performance of the Fund
ABOUT YOUR ACCOUNT
How to Buy Shares
Class A Shares
Class B Shares
Class C Shares
Special Investor Services
AccountLink
Automatic Withdrawal and Exchange Plans
Reinvestment Privilege
Retirement Plans
How to Sell Shares
By Mail
By Telephone
How to Exchange Shares
Shareholder Account Rules and Policies
Dividends, Capital Gains and Taxes
<PAGE>
ABOUT THE FUND
Expenses
The Fund pays a variety of expenses directly for management of its assets,
administration, distribution of its shares and other services, and those
expenses are subtracted from the Fund's assets to calculate the Fund's net
asset value per share. All shareholders therefore pay those expenses
indirectly. Shareholders pay other expenses directly, such as sales
charges and account transaction charges. The following tables are
provided to help you understand your direct expenses of investing in the
Fund and your share of the Fund's business operating expenses that you
will bear indirectly. The numbers below are based on the Fund's expenses
during its last fiscal year ended September 30, 1994.
- Shareholder Transaction Expenses are charges you pay when you buy
or sell shares of the Fund. Please refer to "About Your Account," from
pages __ through __, for an explanation of how and when these charges
apply.
<TABLE>
<CAPTION>
Class A Shares Class B Shares Class C Shares
______________ ______________ ______________
<S> <C> <C> <C>
Maximum Sales Charge on Purchases
(as a % of offering price) 5.75% None None
Sales Charge on Reinvested Dividends None None None
Deferred Sales Charge
(as a % of the lower of the original
purchase price or redemption proceeds) None(1) 5% in the first 1.0% if shares
year, declining are redeemed
to 1% in the within 12 months
sixth year and of purchase(2)
eliminated
thereafter(2)
Exchange Fee None None None
<FN>
_______________________
(1) If you invest $1 million or more ($500,000 or more for purchases by
OppenheimerFunds prototype 401(k) plans), in Class A shares, you may
have to pay a sales charge of up to 1% if you sell your shares
within 18 calendar months from the end of the calendar month during
which you purchased those shares. See "How to Buy Shares - Class
A Shares," below.
(2) See "How to Buy Shares - Class B Shares" and "How to Buy Shares -
Class C Shares," for more information on the contingent deferred
sales charges.
</TABLE>
- Annual Fund Operating Expenses are paid out of the Fund's assets and
represent the Fund's expenses in operating its business. For example, the
Fund pays management fees to its investment adviser, Oppenheimer
Management Corporation (which is referred to in this Prospectus as the
"Manager"). The rates of the Manager's fees are set forth in "How the
Fund is Managed," below. The Fund has other regular expenses for
services, such as transfer agent fees, custodial fees paid to the bank
that holds its portfolio securities, audit fees and legal expenses. Those
expenses are detailed in the Fund's Financial Statements in the Statement
of Additional Information.
The numbers in the table below are projections of the Fund's business
expenses based on the Fund's expenses in its last fiscal year. These
amounts are shown as a percentage of the average net assets of each class
of the Fund's shares for that year. The management fees payable by the
Fund to the Manager were increased, effective June 27, 1994. Therefore,
the management fees in the table below have been restated to reflect the
increase in the management fees as if those increased rates had been in
effect for the entire fiscal year ended September 30, 1994. Had the new
management fee rates not been in effect during a portion of that fiscal
year, the management fees would have been 0.75% of average net assets for
each of Class A and Class C. For further information, see "How the Fund
is Managed - The Manager and Its Affiliates - Fees and Expenses." The
"12b-1 Distribution Plan Fees" for Class A Shares are service plan fees.
For Class B and Class C shares, the Distribution Plan Fees are the service
plan fees and asset-based sales charge. The service fee for each class
is 0.25% of average annual net assets of the class and the asset-based
sales charge for Class B and Class C shares is 0.75%. These plans are
described in greater detail in "How to Buy Shares."
The actual expenses for each class of shares in future years may be
more or less than the numbers in the table, depending on a number of
factors, including the actual value of the Fund's assets represented by
each class of shares. Class C shares were not publicly sold before
December 1, 1993. Therefore, the Annual Fund Operating Expenses shown for
Class C shares are based only on expenses for the period from December 1,
1993 through September 30, 1994. The Annual Fund Operating Expenses shown
for Class B shares are estimates based on amounts that would have been
payable in that period assuming that Class B shares were outstanding
during such fiscal year.
<TABLE>
<CAPTION>
Class A Shares Class B Shares Class C Shares
______________ ______________ ______________
<S> <C> <C> <C>
Management Fees (Restated) 0.80% 0.80% 0.80%
12b-1 Distribution or Service Plan Fees 0.25% 1.00% 1.00%
Other Expenses 0.48% 0.68% 0.68%
Total Fund Operating Expenses
(Restated) 1.53% 2.48% 2.48%
</TABLE>
- Examples. To try to show the effect of these expenses on an
investment over time, we have created the hypothetical examples shown
below. Assume that you make $1,000 investments in each class of shares
of the Fund, and the Fund's annual return is 5%, and that its operating
expenses for each class are the ones shown in the Annual Fund Operating
Expenses chart above (as restated). If you were to redeem your shares at
the end of each period shown below, your investment would incur the
following expenses by the end of 1, 3, 5 and 10 years:
<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years*
______ _______ _______ ________
<S> <C> <C> <C> <C>
Class A Shares $72 $103 $136 $229
Class B Shares $75 $107 $152 $237
Class C Shares $35 $ 77 $132 $282
If you did not redeem your investment, it would incur the following
expenses:
Class A Shares $72 $103 $136 $229
Class B Shares $25 $77 $132 $237
Class C Shares $25 $ 77 $132 $282
<FN>
___________________________
* The Class B expenses in years 7 through 10 are based on the Class A
expenses shown above, because the Fund automatically converts your Class
B shares into Class A shares after 6 years. Because of the asset-based
sales charge and the contingent deferred sales charge on Class B and Class
C shares, long-term Class B and Class C shareholders could pay the
economic equivalent of an amount greater than the maximum front-end sales
charge allowed under applicable regulatory requirements. For Class B
shareholders, the automatic conversion of Class B shares to Class A shares
is designed to minimize the likelihood that this will occur. Please refer
to "How to Buy Shares" for more information.
</TABLE>
These examples show the effect of expenses on an investment, but are
not meant to state or predict actual or expected costs or investment
returns of the Fund, all of which will vary.
<PAGE>
A Brief Overview of the Fund
Some of the important facts about the Fund are summarized below, with
references to the section of this Prospectus where more complete
information can be found. You should carefully read the entire Prospectus
before making a decision about investing in the Fund. Keep the Prospectus
for reference after you invest, particularly for information about your
account, such as how to sell or exchange shares.
- What Is The Fund's Investment Objective? The Fund's investment
objective is to seek capital appreciation consistent with preservation of
principal while providing current income.
- What Does the Fund Invest In? The Fund may invest in common stocks,
convertible securities and debt securities, such as debentures or bonds.
To seek growth, the Fund will emphasize common stocks and convertible
securities. For income, the Fund will invest in debt securities and
dividend-paying stocks. The Fund may emphasize one or more different
types of securities or a combination of securities from time to time,
depending on market conditions. The Fund will normally invest in at least
four countries (including the United States). The Fund may also write
covered calls and use derivative investments to enhance income, and may
use hedging instruments, including some derivative investments, to try to
manage investment risks. These investments and investment methods are
more fully explained in "Investment Objective and Policies," starting on
page __.
- Who Manages the Fund? The Fund's investment adviser (the
"Manager") is Oppenheimer Management Corporation. The Manager (including
a subsidiary) manages investment company portfolios having over $35
billion in assets. The Manager is paid an advisory fee by the Fund, based
on its net assets. The Fund has a portfolio manager, Mr. Frank Jennings,
who is employed by the Manager. He is primarily responsible for the
selection of the Fund's securities. The Fund's Board of Trustees, elected
by shareholders, oversees the investment adviser and the portfolio
manager. Please refer to "How the Fund is Managed" starting on page __
for more information about the Manager and its fees.
- How Risky is the Fund? All investments carry risks to some degree.
The Fund's investments in stocks and bonds are subject to changes in their
value from a number of factors such as changes in general bond and stock
market movements, or the change in value of particular stocks or bonds
because of an event affecting the issuer. Changes in interest rates can
affect bond prices. These changes affect the value of the Fund's
investments and its price per share. The Fund's investment in foreign
securities involves additional risks not associated with investment in
domestic securities, including risks associated with changes in currency
rates.
Certain of the Fund's investment techniques and strategies, such as
purchasing securities with borrowed funds, may subject an investment in
the Fund to relatively greater risks and costs than a mutual fund that
does not utilize these practices. While the Manager tries to reduce risks
by diversifying investments, by carefully researching securities before
they are purchased for the portfolio, and in some cases by using hedging
techniques, there is no guarantee of success in achieving the Fund's
objective and your shares may be worth more or less than their original
cost when you redeem them. Please refer to "Investment Objective and
Policies" starting on page __ for a more complete discussion of the Fund's
investment risks.
- How Can I Buy Shares? You can buy shares through your dealer or
financial institution, or you can purchase shares directly through the
Distributor by completing an Application or by using an Automatic
Investment Plan under AccountLink. Please refer to "How to Buy Shares"
on page __ for more details.
- Will I Pay a Sales Charge to Buy Shares? The Fund offers the
individual investor three classes of shares. All classes have the same
investment portfolio but different expenses. Class A shares are offered
with a front-end sales charge, starting at 5.75%, and reduced for larger
purchases. Class B and C shares are offered without a front-end sales
charge, but may be subject to a contingent deferred sales charge if
redeemed within six years or 12 months, respectively, of buying them.
There is also an annual asset-based sales charge on Class B and C shares.
Please review "How to Buy Shares" starting on page ___ for more details,
including a discussion about which class may be appropriate for you.
- How Can I Sell My Shares? Shares can be redeemed by mail or by
telephone call to the Transfer Agent on any business day, or through your
dealer. Please refer to "How to Sell Shares" on page __. The Fund also
offers exchange privileges to other Oppenheimer funds, described in "How
To Exchange Shares" on page __.
- How Has the Fund Performed? The Fund measures its performance by
quoting its average annual total returns and cumulative total returns,
which measure historical performance. Those returns can be compared to
the returns (over similar periods) of other funds. Of course, other funds
may have different objectives, investments, and levels of risk. The
Fund's performance can also be compared to a broad-based market index and
a narrower market index, which we have done on page __. Please remember
that past performance does not guarantee future results.
Financial Highlights
The table on the following pages presents selected financial
information about the Fund, including per share data, expense ratios and
other data based on the Fund's average net assets. This information has
been audited by KPMG Peat Marwick LLP, the Fund's independent auditors,
whose report on the Fund's financial statements for the fiscal year ended
September 30, 1994 is included in the Statement of Additional Information
together with the Fund's unaudited financial statements for the six months
ended March 31, 1995. Class C shares were publicly offered only during
a portion of that period, commencing December 1, 1993. Class B shares
were not publicly offered during the periods shown. Accordingly, no
information on Class B shares is reflected in the table below or in the
Fund's financial statements.
<TABLE>
<CAPTION>
Class A Class C
------- -----------------------------------------------------------------------
Six Months Year Six Months Period
Ended Mar. 31, Ended Ended Ended
1995 Sept. 30, March 31, 1995 Sept. 30,
(Unaudited) 1994 1993 1992 1991(2) (Unaudited) 1994(1)
-------- -------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Data:
Net asset value,
beginning of period $ 15.21 $ 14.09 $ 11.91 $ 12.43 $ 11.43 $ 15.17 $
14.85
-------- -------- ------- ------- ------- ------- -------
Income (loss) from
investment operations:
Net investment income .19 .33 .29 .26 .37 .14 .22
Net realized and unrealized
gain (loss) on investments
and foreign currency
transactions (.79) 1.62 2.17 (.47) .95 (.79) .87
-------- -------- ------- ------- ------- ------- -------
Total income (loss) from
investment operations (.60) 1.95 2.46 (.21) 1.32 (.65) 1.09
-------- -------- ------- ------- ------- ------- -------
Dividends and distributions
to shareholders:
Dividends from net
investment income (.20) (.35) (.17) (.28) (.32) (.16) (.29)
Distributions from net
realized gain on
investments and
foreign currency
transactions (.82) (.48) (.11) (.03) -- (.82) (.48)
======== ======== ======= ======= =======
======= =======
Total dividends and
distributions to
shareholders (1.02) (.83) (.28) (.31) (.32) (.98) (.77)
-------- -------- ------- ------- ------- ------- -------
Net asset value, end
of period $ 13.59 $ 15.21 $ 14.09 $ 11.91 $ 12.43 $ 13.54 $ 15.17
-------- -------- ------- ------- ------- ------- -------
Total Return, at Net
Asset Value(3) (3.85)% 13.96% 21.00% (1.76)% 11.73% (4.23)% 7.41%
-------- -------- ------- ------- ------- ------- -------
Ratios/Supplemental Data:
Net assets, end of
period (in thousands) $115,270 $124,017 $86,019 $49,735 $29,239 $21,642 $17,008
-------- -------- ------- ------- ------- ------- -------
Average net assets
(in thousands) $122,565 $117,164 $59,951 $37,116 $19,340 $19,216 $ 7,896
-------- -------- ------- ------- ------- ------- -------
Number of shares
outstanding at end of
period (in thousands) 8,480 8,154 6,104 4,177 2,352 1,598 1,121
-------- -------- ------- ------- ------- ------- -------
Ratios to average
net assets:
Net investment income 2.63%(4) 2.44% 2.68% 2.41% 4.05%(4) 1.85%(4) 1.85%(4)
Expenses 1.65%(4) 1.49% 1.56% 1.74% 1.94%(4) 2.42%(4) 2.44%(4)
-------- -------- ------- ------- ------- ------- -------
Portfolio turnover rate 51.9%(6) 87.4%(5) 90.6% 51.3% 23.5% 51.9%(6) 87.4%(5)
</TABLE>
1. For the period from December 1, 1993 (inception of offering) to September
30, 1994.
2. For the period from October 22, 1990 (commencement of operations) to
September 30, 1991.
3. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at
the net asset value calculated on the last business day of the fiscal period.
Sales charges are not reflected in the total returns. Total returns are not
annualized for periods of less than one full year.
4. Annualized.
5. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at the
time of acquisition of one year or less are excluded from the calculation.
Purchases and sales of investment securities (excluding short-term securities)
for the year ended September 30, 1994 were $149,601,811 and $98,419,511,
respectively.
6. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at the
time of acquisition of one year or less are excluded from the calculation.
Purchases and sales of investment securities (excluding short-term securities)
for the six months ended March 31, 1995 were $71,254,436 and $66,800,064,
respectively.
<PAGE>
Investment Objective and Policies
Objective. As its investment objective, the Fund seeks capital
appreciation consistent with preservation of principal while providing
current income.
Investment Policies and Strategies. In seeking its investment objective,
the Fund may invest in common stocks and securities convertible into
common stocks to seek growth, or debt securities such as bonds, notes and
debentures, and income producing stocks, to seek current income. The Fund
does not have any policy requiring that a specific percentage of its
assets be invested to seek growth or to seek income, and the Fund may at
times invest primarily for growth, or primarily for income, or a
combination of the two, depending on the Manager's assessment of market
conditions.
The Fund will invest in foreign as well as U.S. securities and normally
will invest in at least four countries (including the United States). The
Manager expects that the Fund will normally invest a substantial portion
of its assets in foreign securities (discussed in "Foreign Securities,"
below). While the Fund may invest in securities having appreciation
possibilities, the Manager will select securities which, in the view of
the Manager, would not involve undue risk to principal. However, the
prices of stocks will fluctuate and the value of the Fund's shares will
also fluctuate as a result.
The Fund's portfolio manager currently uses an investment strategy in
selecting foreign and domestic securities that examines the effects of
worldwide trends on the growth of various business sectors. These trends,
or "global themes," currently include telecommunications expansion,
emerging consumer markets, infrastructure development, natural resource
use and development, corporate restructuring, capital market development
in foreign countries, healthcare expansion and global integration. These
trends, which may affect the growth of companies having businesses in
these sectors or which are affected by their development, may suggest
opportunities for investing the Fund's assets. The Manager does not
invest a fixed amount of the Fund's assets in any one sector, and these
themes and this approach may change over time.
When investing the Fund's assets, the Manager considers many factors,
including general economic conditions abroad relative to those in the U.S.
and the trends in foreign and domestic stock markets. The Fund may try
to hedge against losses in the value of its portfolio of securities by
using hedging strategies or derivative investments, described below.
When market or economic conditions are unstable, the Fund may invest
all or a portion of its assets in U.S. Government securities, money market
instruments, commercial paper and short-term debt securities. See
"Temporary Defensive Investments," below. It is expected that short-term
debt securities (which mature in one year or less from the date of
purchase) will be emphasized for defensive purposes.
The Fund's portfolio manager may employ special investment techniques
in selecting securities for the Fund. These are also described below.
Additional information may be found about them under the same headings in
the Statement of Additional Information. The Fund is not intended for
investors whose principal objective is assured income. Since market risks
are inherent in all investments to varying degrees, there can be no
assurance that the Fund will meet its investment objective.
- Can the Fund's Investment Objective and Policies Change? The Fund
has an investment objective, described above, as well as investment
policies it follows to try to achieve its objective. Additionally, the
Fund uses certain investment techniques and strategies in carrying out
those investment policies. The Fund's investment policies and techniques
are not "fundamental" unless this Prospectus or the Statement of
Additional Information says that a particular policy is "fundamental."
The Fund's investment objective is a fundamental policy.
Fundamental policies are those that cannot be changed without the
approval of a "majority" of the Fund's outstanding voting shares. The
term "majority" is defined in the Investment Company Act to be a
particular percentage of outstanding voting shares (and this term is
explained in the Statement of Additional Information). The Fund's Board
of Trustees may change non-fundamental policies without shareholder
approval, although significant changes will be described in amendments to
this Prospectus.
- Stock Investment Risks. Because the Fund may invest a substantial
portion of its assets in stocks, the value of the Fund's portfolio will
be affected by changes in the stock markets. At times, the stock markets
can be volatile and stock prices can change substantially. This market
risk will affect the Fund's net asset values per share, which will
fluctuate as the values of the Fund's portfolio securities change. Not
all stock prices change uniformly or at the same time, not all stock
markets move in the same direction at the same time, and other factors can
affect a particular stock's prices (for example, poor earnings reports by
an issuer, loss of major customers, major litigation against an issuer,
and changes in government regulations affecting an industry). Not all of
these factors can be predicted.
The Fund attempts to limit market risks by diversifying its
investments, that is, by not holding a substantial amount of the stock of
any one company and by not investing too great a percentage of the Fund's
assets in any one company. Also, the Fund does not concentrate its
investments in any one industry or group of industries. Because changes
in stock and bond market prices can occur at any time, and because yields
on debt securities available at different times will vary, there is no
assurance that the Fund will achieve its investment objective, and when
you redeem your shares, they may be worth more or less than what you paid
for them.
- Interest Rate Risks. Fixed income or debt securities are subject
to credit risks, described below, and are also subject to changes in their
value due to changes in prevailing interest rates. When prevailing
interest rates fall, the values of already-issued fixed-income securities
generally rise. When interest rates rise, the values of already-issued
fixed-income securities generally decline. The magnitude of these
fluctuations will often be greater for longer-term fixed-income securities
than shorter-term fixed-income securities. Changes in the value of
securities held by the Fund mean that the Fund's share prices can go up
or down when interest rates change because of the effect of interest rate
fluctuations on the value of the Fund's portfolio of debt securities.
- Special Risks of Lower-Rated Securities. The Fund does not limit
its investments in bonds and debentures to issues having specific credit
ratings. The Manager does not rely solely on the ratings of rated
securities in making investment decisions but evaluates other economic and
business factors affecting the issuer as well. The Fund may invest in
bonds and debentures below "investment grade" (investment grade securities
are generally those in the four highest rating categories of Moody's
Investors Service, Inc. or Standard & Poor's Corporation). The Fund can
invest in securities rated "C" or "D," which indicate that the obligations
are speculative in a high degree and may be in default.
The Fund will invest no more than 25% of its total assets in non-
investment grade securities, which are those securities rated below "BBB"
by Standard & Poor's or below "Baa" by Moody's, or unrated securities that
are judged by the Manager to have comparable ratings. They are commonly
called "junk bonds." The Fund currently intends to invest no more than
15% of its total assets in securities rated below BBB or Baa. The Fund
is not obligated to dispose of securities that are downgraded below
investment grade after the Fund buys them. The Appendix to the Statement
of Additional Information describes these rating categories.
High yield, lower-grade securities, whether rated or unrated, often
have speculative characteristics. They may be subject to greater price
fluctuations and risk of loss of income and principal than lower yielding,
investment grade securities. There may be less of a market for them and
therefore they may be harder to sell at an acceptable price. There is a
relatively greater possibility that the issuer's earnings may be
insufficient to make the payments of interest due on the bonds. The
issuer's low creditworthiness may increase the potential for its
insolvency.
- How the Fund's Portfolio Securities Are Rated. As of June 30,
1995, the Fund's portfolio included corporate bonds in the following S&P
rating categories (if the securities were unrated they were determined by
the Manager to be comparable to the category indicated.) The amounts shown
are dollar-weighted average values of the bonds in each category measured
as a percentage of the Fund's total assets: AAA, 10.50%; AA, 0.68%; A,
2.49%; BBB, 0%; BB, 4.99%; B, 9.48%; CCC, 1.90%; CC, 0%; C, 0%; D, 0%. The
Appendix to the Statement of Additional Information describes the rating
categories. The allocation of the Fund's assets among securities in the
different rating categories will vary over time.
- Foreign Securities. Under normal circumstances, as a matter of
fundamental policy, the Fund will invest in the United States and at least
three foreign countries. Otherwise, the Fund may invest its assets
without limit in equity and debt securities issued or guaranteed by
foreign companies or foreign governments, including foreign government
agencies. The Fund will normally invest a substantial amount of its
assets in foreign securities. The Fund may invest in any country,
whether it is developed or underdeveloped. Investments in securities of
issuers in non-industrialized countries generally involve more risk and
may be considered to be highly speculative. The Fund's selection of
foreign securities must be consistent with preservation of capital,
however, under its investment objective.
The Fund may invest in foreign securities that are U.S. dollar-
denominated debt obligations known as "Brady Bonds." They are issued to
exchange existing commercial bank loans to foreign entities for new
obligations that are generally collateralized by zero coupon U.S. Treasury
securities having the same maturity. The Fund may also buy foreign debt
obligations such as bonds (including sinking fund and callable bonds),
debentures and notes (including variable and floating rate instruments),
and preferred stocks and zero coupon securities. The Fund may purchase
foreign securities denominated in U.S. dollars or in foreign currencies.
If the Fund's securities are held abroad, the countries in which they are
held and the sub-custodians holding them must be approved by the Fund's
Board of Trustees. The Fund will hold foreign currency only in connection
with the purchase or sale of foreign securities.
- Foreign securities have special risks. There are special risks in
investing in foreign securities. Because the Fund may buy securities
denominated in foreign currencies or traded primarily in foreign markets,
a change in the value of a foreign currency against the U.S. dollar will
result in a change in the U.S. dollar value of securities denominated in
that foreign currency.
Currency rate changes will also affect the income available to
distribute to shareholders of the Fund. Although the Fund's investment
income from foreign securities will be received in foreign currencies, the
Fund will be required to distribute its income to shareholders in U.S.
dollars. Therefore, the Fund will absorb the cost of currency
fluctuations. While the Fund may use hedging techniques to try to reduce
the risk of currency fluctuations, if the Fund suffers losses on foreign
currencies after it has distributed its income during the year, it may
find that it has distributed more income than was available from net
investment income. That could result in previously distributed income
being re-classified as a return of capital to shareholders.
Foreign issuers are not subject to the same accounting and disclosure
requirements that U.S. companies are subject to. The value of foreign
investments may be affected by other factors, including exchange control
regulations, expropriation or nationalization of a company's assets,
foreign taxes, delays in settlement of transactions, changes in
governmental economic or monetary policy in the U.S. or abroad, or other
political and economic factors. Issuers of foreign securities that are
not registered for sale in the U.S. do not have to comply with disclosure
requirements that U.S. companies are subject to.
In addition, it is generally more difficult to obtain court judgments
outside the U.S. if the Fund were to sue a foreign issuer or broker.
Additional costs may be incurred because foreign brokerage commissions are
generally higher than U.S. rates, and there are additional custodial costs
associated with holding securities abroad. More information about the
risks and potential rewards of investing in foreign securities is
contained in the Statement of Additional Information.
- Domestic Debt Securities. In addition to the bonds and debentures
described above, that the Fund can invest in, it may also invest in other
types of debt securities.
- Mortgage-Backed Securities and CMOs. The Fund may invest in
securities that represent participation interests in pools of residential
mortgage loans, including collateralized mortgage obligations (CMOs).
Some CMOs may be issued or guaranteed by agencies or instrumentalities of
the U.S. Government (for example, Ginnie Maes, Freddie Macs and Fannie
Maes). Other CMOs are issued by private issuers, such as commercial
banks, savings and loan institutions, private mortgage insurance
companies, mortgage bankers and other secondary market issuers.
Certain mortgage-backed securities "pass-through" to investors the
interest and principal payments generated by a pool of mortgages assembled
for sale by government agencies or private issuers. Pass-through
mortgage-backed securities are subject to the risk that the principal
value may be repaid at any time because of prepayments on the underlying
mortgages. As a result, their price and yield may be more volatile than
fixed-income securities that have a fixed maturity and interest rate.
Mortgage-backed securities created by private issuers may be supported
by various forms of insurance or guarantees, although there can be no
assurance that private issuers will be able to meet their obligations.
As new types of mortgage-related securities are developed and offered to
investors, the Manager will, subject to the direction of the Fund's Board
of Trustees and consistent with the Fund's investment objective and
policies, consider making investment in new types of mortgage-related
securities.
The Fund may also enter into "forward roll" transactions with banks
or other buyers that provide for future delivery of the mortgage-backed
securities in which the Fund may invest. The Fund would be required to
place cash, U.S. Government securities or other high-grade debt securities
in a segregated account with its custodian bank in an amount equal to its
purchase payment obligation under the roll.
- Other Asset-Backed Securities. Asset-backed securities are
fractional interests in pools of consumer loans or other trade
receivables. They are similar to mortgage-backed securities, described
above. They are issued by trusts and special purpose corporations. They
are backed by a pool of assets, such as credit card or auto loan
receivables, which are the obligations of a number of different parties.
The income from the underlying pool is passed through to holders of the
participation interests in the pool. To try to reduce some of the risks
that the underlying debtors won't pay their loan installments, the pools
may offer a credit enhancement, such as a letter of credit by a bank to
secure the pool's obligation to repay its investors, or a guarantee or a
preference right. However, the credit enhancement may apply only to a
fraction of the security's value. These securities present special risks.
For example, in the case of credit card receivables, the issuer of the
security may have no security interest in the underlying debt that serves
as the stream of income and collateral security for the pool.
- Warrants and Rights. Warrants basically are options to purchase
stock at set prices that are valid for a limited period of time. Rights
are options to purchase securities, normally granted to current
stockholders by the issuer. The Fund may invest up to 10% of its total
assets in warrants or rights. That 10% does not apply to warrants and
rights the Fund acquired as part of units that include other securities
or that were attached to other securities. However, the Fund has
undertaken that its investments in warrants and rights shall not exceed
5% of its net assets. In addition, the Fund has undertaken that no more
than 2% of the Fund's assets may be invested in warrants that are not
listed on the New York or American Stock Exchanges. For further details
about these investments, please refer to "Warrants and Rights" in the
Statement of Additional Information.
- Portfolio Turnover. A change in the securities held by the Fund is
known as "portfolio turnover." The Fund ordinarily does not engage in
short-term trading to try to achieve its objective. As a result, the
Fund's portfolio turnover is not expected to be more than 100% each year.
The "Financial Highlights," above, show the Fund's portfolio turnover rate
during past fiscal years.
Portfolio turnover affects brokerage costs, dealer mark-ups and other
transaction costs. It may also affect the Fund's ability to qualify as
a "regulated investment company" under the Internal Revenue Code for tax
deductions for dividends and capital gains distributions the Fund pays to
shareholders. The Fund qualified in its last fiscal year and intends to
do so in the coming year, although it reserves the right not to qualify.
Other Investment Techniques and Strategies. The Fund may also use the
investment techniques and strategies described below. These techniques
involve certain risks. The Statement of Additional Information contains
more information about these practices, including limitations on their use
that may help reduce some of the risks.
- Temporary Defensive Investments. Under normal circumstances, the
Fund may hold a portion of its assets in cash equivalents (commercial
paper, Treasury bills and U.S. Government securities maturing in one year
or less) for day-to-day operating purposes. When stock market prices are
falling or in other unusual economic or business circumstances, the Fund
may invest all or a portion of its assets in defensive securities.
Securities selected for defensive purposes usually may include (I)
obligations issued or guaranteed by the U.S. Government, its
instrumentalities or agencies, (ii) certificates of deposit, bankers'
acceptances, time deposits, and letters of credit if they are payable in
the United States or London, England and are issued or guaranteed by a
domestic or foreign bank having total assets in excess of $1 billion,
(iii) commercial paper rated in the three highest categories by Standard
& Poor's or Moody's and (iv) short-term debt securities (which are
securities maturing in one year or less from the date of purchase),
including rated or unrated bonds, debentures and preferred stocks.
- Special Risks - Borrowing for Leverage. The Fund may borrow up to
10% of the value of its net assets from banks on an unsecured basis to buy
securities. This is a speculative investment method known as "leverage."
This technique may subject the Fund to greater risks and costs than funds
that do not borrow. These risks may include the possibility that the
Fund's net asset values per share will fluctuate more than funds that do
not borrow, since the Fund pays interest on borrowings and interest
expense affects the Fund's share prices. Borrowing is subject to limits
under the Investment Company Act, described in more detail in the
Statement of Additional Information.
- Loans of Portfolio Securities. To attempt to increase its income
and for liquidity purposes, the Fund may lend its portfolio securities to
brokers, dealers and other financial institutions. The value of the
securities loaned may not exceed 25% of the value of the Fund's net
assets. Loans are subject to other conditions described in the Statement
of Additional Information. The Fund presently does not intend to lend its
portfolio securities, but if it does, the value of securities loaned is
not expected to exceed 5% of the value of its total assets in the current
year.
- Forward Rolls. The Fund may enter into "forward roll" transactions
with banks with respect to the mortgage-related securities in which it can
invest. These require the Fund to secure its obligation in the
transaction by segregating assets with its custodian bank equal in amount
to its obligation under the roll.
- Repurchase Agreements. The Fund may enter into repurchase
agreements. They are primarily used for liquidity purposes. In a
repurchase transaction, the Fund buys a security and simultaneously sells
it to the vendor for delivery at a future date. Repurchase agreements
must be fully collateralized. However, if the vendor fails to pay the
resale price on the delivery date, the Fund may incur costs in disposing
of the collateral and may experience losses if there is any delay in its
ability to do so. The Fund will not enter into a repurchase agreement that
causes more than 10% of its net assets to be subject to repurchase
agreements having a maturity beyond seven days. There is no limit on the
amount of the Fund's net assets that may be subject to repurchase
agreements of seven days or less.
- Illiquid and Restricted Securities. Under the policies and
procedures established by the Fund's Board of Trustees, the Manager
determines the liquidity of certain of the Fund's investments. Investments
may be illiquid because of the absence of an active trading market, making
it difficult to value them or dispose of them promptly at an acceptable
price. A restricted security is one that has a contractual restriction on
its resale or which cannot be sold publicly until it is registered under
the Securities Act of 1933. The Fund will not invest more than 10% of its
net assets in illiquid or restricted securities (that limit may increase
to 15% if certain state laws are changed or the Fund's shares are no
longer sold in those states). The Fund's percentage limitation on these
investments does not apply to certain restricted securities that are
eligible for resale to qualified institutional purchasers.
- "When-Issued" and "Delayed Delivery" Transactions. The Fund may
purchase securities on a "when-issued" basis and may purchase or sell
securities on a "delayed delivery" basis. These terms refer to securities
that have been created and for which a market exists, but which are not
available for immediate delivery. There may be a risk of loss to the Fund
if the value of the security declines prior to the settlement date.
- Loan Participation Interests. The Fund may acquire participation
interests from banks and brokers in loans that are made primarily to U.S.
or foreign companies. The value of loan participation interests depends
primarily upon the creditworthiness of the borrower and its ability to pay
interest and repay the principal. If a borrower fails to make scheduled
interest or principal payments, the Fund could experience a reduction in
its income and might experience a decline in the net asset value of its
shares. The Fund's Board of Trustees has established quality standards
for participation interests the Fund may invest in. The Fund currently
intends to invest less than 5% of its net assets in participation
interests.
- Hedging. As described below, the Fund may purchase and sell certain
kinds of futures contracts, put and call options, forward contracts, and
options on futures and securities, or enter into interest rate swap
agreements. These are all referred to as "hedging instruments." The Fund
does not use hedging instruments for speculative purposes, and has limits
on the use of them, described below. The hedging instruments the Fund may
use are described below and in greater detail in "Other Investment
Techniques and Strategies" in the Statement of Additional Information.
The Fund may buy and sell options, futures and forward contracts for
a number of purposes. It may do so to try to manage its exposure to the
possibility that the prices of its portfolio securities may decline, or
to establish a position in the securities market as a temporary substitute
for purchasing individual securities. It may also use certain kinds of
hedging instruments to try to manage its exposure to changing interest
rates.
Some of these strategies, such as selling futures, buying puts and
writing covered calls, hedge the Fund's portfolio against price
fluctuations. Other hedging strategies, such as buying futures and call
options, tend to increase the Fund's exposure to the securities market.
Forward contracts are used to try to manage foreign currency risks on the
Fund's foreign investments. Foreign currency options are used to try to
protect against declines in the dollar value of foreign securities the
Fund owns, or to protect against an increase in the dollar cost of buying
foreign securities. Writing covered call options may also provide income
to the Fund for liquidity purposes or to raise cash to distribute to
shareholders.
- Futures. The Fund may buy and sell futures contracts that relate to
(1) broadly-based stock indices (these are referred to as Stock Index
Futures), (2) interest rates (these are referred to as Interest Rate
Futures), (3) bond indices (these are referred to as Bond Index Futures)
or (4) foreign currencies (these are called Forward Contracts and are
discussed below).
- Put and Call Options. The Fund may buy and sell certain kinds of
put options (puts) and call options (calls). Calls the Fund buys or sells
must be listed on a securities or commodities exchange, or traded in the
over-the-counter market. In the case of puts and calls on foreign
currency, they must be traded on a securities or commodities exchange,
or quoted by recognized dealers in those options. A call or put option
may not be purchased if the value of all of the Fund's put and call
options would exceed 5% of the Fund's total assets.
The Fund may buy calls only on securities, foreign currencies, broadly-
based stock or bond indices, Stock Index Futures, Interest Rate Futures
and Bond Index Futures.
The Fund may write (that is, sell) call options. Each call the Fund
writes must be "covered" while it is outstanding. That means the Fund
must own the investment on which the call was written or it must own other
securities that are acceptable for the escrow arrangements required for
calls. The Fund may write calls on Futures contracts it owns, but these
calls must be covered by securities or other liquid assets the Fund owns
and segregated to enable it to satisfy its obligations if the call is
exercised. When the Fund writes a call, it receives cash (called a
premium). The call gives the buyer the ability to buy the investment on
which the call was written from the Fund at the call price during the
period in which the call may be exercised. If the value of the investment
does not rise above the call price, it is likely that the call will lapse
without being exercised, while the Fund keeps the cash premium (and the
investment).
The Fund may purchase and sell put options. Buying a put on an
investment gives the Fund the right to sell the investment at a set price
to a seller of a put on that investment. The Fund can buy only those puts
that relate to securities (whether or not it holds such securities in its
portfolio), foreign currencies, Stock Index Futures, Interest Rate Futures
and Bond Index Futures. The Fund may write puts on securities, broadly-
based stock or bond indices, foreign currencies or Stock Index Futures.
Puts the Fund buys and sells must be listed on a securities or commodities
exchange or traded in the over-the-counter market. Any put sold must be
covered by segregated liquid assets with not more than 50% of the Fund's
assets subject to puts.
- Forward Contracts. Forward contracts are foreign currency exchange
contracts. They are used to buy or sell foreign currency for future
delivery at a fixed price. The Fund uses them to try to "lock in" the
U.S. dollar price of a security denominated in a foreign currency that the
Fund has bought or sold, or to protect against possible losses from
changes in the relative values of the U.S. dollar and a foreign currency.
The Fund limits its exposure in foreign currency exchange contracts in a
particular foreign currency to the amount of its assets denominated in
that currency or in a closely-correlated currency. The Fund may also use
"cross-hedging," where the Fund hedges against changes in currencies other
than the currency in which a security it holds is denominated.
- Interest Rate Swaps. In an interest rate swap, the Fund and another
party exchange their right to receive, or their obligation to pay,
interest on a security. For example, they may swap a right to receive
floating rate payments for the right to receive fixed rate payments. The
Fund enters into swaps only on securities it owns. The Fund may not enter
into swaps with respect to more than 25% of its total assets. Also, the
Fund will segregate liquid assets (such as cash or U.S. Government
securities) to cover any amounts it could owe under swaps that exceed the
amounts it is entitled to receive, and it will adjust that amount daily,
as needed.
- Hedging instruments can be volatile instruments and may involve
special risks. The use of hedging instruments requires special skills and
knowledge of investment techniques that are different than what is
required for normal portfolio management. If the Manager uses a hedging
instrument at the wrong time or judges market conditions incorrectly,
hedging strategies may reduce the Fund's return. The Fund could also
experience losses if the prices of its futures and options positions were
not correlated with its other investments or if it could not close out a
position because of an illiquid market for the future or option.
Options trading involves the payment of premiums and has special tax
effects on the Fund. There are also special risks in particular hedging
strategies. For example, if a covered call written by the Fund is
exercised on an investment that has increased in value, the Fund will be
required to sell the investment at the call price and will not be able to
realize any profit if the investment has increased in value above the call
price. In writing a put, there is a risk that the Fund may be required
to buy the underlying security at a disadvantageous price. The use of
forward contracts may reduce the gain that would otherwise result from a
change in the relationship between the U.S. dollar and a foreign currency.
Interest rate swaps are subject to credit risks (the other party may fail
to meet its obligation) and also to interest rate risks: the Fund could
be obligated to pay more under its swap agreements that it receives under
them, as a result of interest rate changes. These risks and the hedging
strategies the Fund may use are described in greater detail in the
Statement of Additional Information.
- Derivative Investments. In general, a "derivative investment" is
a specially-designed investment. Its performance is linked to the
performance of another investment or security, such as an option, future,
index or currency. The Fund can invest in a number of different kinds
of "derivative investments." They are used in some cases for hedging
purposes, and in others because they offer the potential for increased
income and principal value. In the broadest sense, exchange-traded
options and futures contracts (please refer to "Hedging" above) may be
considered "derivative investments."
One type of derivative the Fund may invest in is an "index-linked
note." On the maturity of this type of debt security, payment is made
based on the performance of an underlying index, unlike a typical note,
where repayment of principal is based on a set face amount. Another
derivative investment the Fund may invest in is a currency-indexed
security. These are typically short-term or intermediate-term debt
securities. Their value at maturity or the rates at which they pay income
are determined by the change in value of the U.S. dollar against one or
more foreign currencies or an index. In some cases, these securities may
pay an amount at maturity based on a multiple of the amount of the
relative currency movements. This variety of index security offers the
potential for greater income but at a greater risk of loss.
Other derivative investments the Fund may invest in include debt
exchangeable for common stock of an issuer or "equity-linked debt
securities" of an issuer. At maturity, the debt security is exchanged for
common stock of the issuer or is payable in an amount based on the price
of the issuer's common stock at the time of maturity. In either case
there is a risk that the amount payable at maturity will be less than the
principal amount of the debt (because the price of the issuer's common
stock may not be as high as was expected).
- Derivatives may entail special risks. The company issuing the
instrument might not pay the amount due on the maturity of the instrument.
Also, the underlying investment or security on which the derivative is
based might not perform the way the Manager expected it to perform. The
performance of derivative investments may also be influenced by interest
rate changes in the U.S. and abroad. All of these risks mean that the
Fund might realize less income than expected from its investments, or that
it can lose part of the value of its investments, which will affect the
Fund's share price. Certain derivative investments held by the Fund may
trade in the over-the-counter markets and may be illiquid. If that is the
case, the Fund's investment in them will be limited, as discussed in
"Illiquid and Restricted Securities," above.
- Special Situations. The Fund may invest in securities of companies
that are in "special situations" that the Manager believes present
opportunities for capital growth. A "special situation" may be an event
such as a proposed merger, reorganization, or other unusual development
that is expected to occur and which may result in an increase in the value
of a company's securities regardless of general business conditions or the
movement of prices in the securities market as a whole. There is a risk
that the price of the security may decline if the anticipated development
fails to occur.
- Short Sales "Against-the-Box". In a short sale, the seller does not
own the security that is sold, but normally borrows the security to
fulfill its delivery obligation. The seller later buys the securities to
repay the loan, in the expectation that the price of the security will be
lower when the purchase is made, resulting in a gain. The Fund may not
sell securities short except in collateralized transactions referred to
as short sales against-the-box," where the Fund owns an equivalent amount
of the securities sold short. This technique is primarily used for tax
purposes. No more than 15% of the Fund's net assets will be held as
collateral for such short sales at any one time.
- Investing in Small, Unseasoned Companies. The Fund may invest in
securities of small, unseasoned companies. These are companies that have
been in operation for less than three years, counting the operations of
any predecessors. Securities of these companies may have limited
liquidity (which means that the Fund may have difficulty selling them at
an acceptable price when it wants to) and the prices of these securities
may be volatile. The Fund may not invest more than 5% of its net assets
in securities of small, unseasoned issuers.
Other Investment Restrictions. The Fund has certain investment
restrictions that are fundamental policies. Under these fundamental
policies, the Fund cannot do any of the following:
- With respect to 75% of its assets, the Fund cannot invest in
securities of any one issuer (other than securities issued by the U.S.
Government or any of its agencies or instrumentalities) if immediately
thereafter (a) more than 5% of the Fund's total assets would be invested
in securities of that issuer, or (b) the Fund would then own more than 10%
of that issuer's voting securities.
- The Fund cannot concentrate investments to the extent that more than
25% of the value of its total assets is invested in securities of issuers
in the same industry (other than securities of the U.S. Government or any
of its agencies or instrumentalities).
All of the percentage restrictions described above and elsewhere in
this Prospectus (other than the regulatory percentage limits in the
Statement of Additional Information that apply to borrowing) apply only
at the time the Fund purchases a security, and the Fund need not dispose
of a security merely because the size of the Fund's assets has changed or
the security has increased in value relative to the size of the Fund.
There are other fundamental policies discussed in the Statement of
Additional Information.
How the Fund is Managed
Organization and History. The Fund was organized in 1990 as a
Massachusetts business trust. The Fund is an open-end, diversified
management investment company, with an unlimited number of authorized
shares of beneficial interest.
The Fund is governed by a Board of Trustees, which is responsible for
protecting the interests of shareholders under Massachusetts law. The
Trustees periodically meet throughout the year to oversee the Fund's
activities, review its performance, and review the actions of the Manager.
"Trustees and Officers of the Fund" in the Statement of Additional
Information names the Trustees and officers of the Fund and provides more
information about them. Although the Fund is not required by law to hold
annual meetings, it may hold shareholder meetings from time to time on
important matters, and shareholders have the right to call a meeting to
remove a Trustee or to take other action described in the Fund's
Declaration of Trust.
The Board of Trustees has the power, without shareholder approval,
to divide unissued shares of the Fund into two or more classes. The Board
has done so, and the Fund currently has three classes of shares, Class A,
Class B and Class C. Each class has its own dividends and distributions
and pays certain expenses, which may be different for the different
classes. Each class may have a different net asset value. Each share has
one vote at shareholder meetings, with fractional shares voting
proportionally. Only shares of a particular class vote as a class on
matters that affect that class alone. Shares are freely transferrable.
The Manager and Its Affiliates. The Fund is managed by the Manager,
Oppenheimer Management Corporation, which is responsible for selecting the
Fund's investments and handling its day-to-day business. The Manager
carries out its duties, subject to the policies established by the Board
of Trustees, under an Investment Advisory Agreement which states the
Manager's responsibilities. The Agreement sets forth the fees paid by the
Fund to the Manager and describes the expenses that the Fund is
responsible to pay to conduct its business.
The Manager has operated as an investment adviser since 1959. The
Manager (including a subsidiary) currently manages investment companies,
including other Oppenheimer funds, with assets of more than $35 billion
as of June 30, 1995, and with more than 2.6 million shareholder accounts.
The Manager is owned by Oppenheimer Acquisition Corp., a holding company
that is owned in part by senior officers of the Manager and controlled by
Massachusetts Mutual Life Insurance Company.
- Portfolio Manager. The Portfolio Manager of the Fund is Frank
Jennings, effective October 2, 1995. He is a Vice President of the
Manager and he is the person principally responsible for the day-to-day
management of the Fund's portfolio. Prior to joining the Manager, Mr.
Jennings was the Managing Director of Global Equities at Mitchell Hutchins
Asset Management, Inc., a subsidiary of Paine Webber, Inc. Prior to that,
Mr. Jennings was a global funds manager for AIG Global Investors.
- Fees and Expenses. Under a new Investment Advisory Agreement, which
became effective June 27, 1994, the Fund pays the Manager the following
annual fees, which decline on additional assets as the Fund grows: 0.80%
of the first $250 million of net assets; 0.77% of the next $250 million;
0.75% of the next $500 million; 0.69% of the next $1 billion; and 0.67%
of net assets in excess of $2 billion. Prior to June 27, 1994, the
following fee rates were in effect: 0.75% of the first $200 million of
aggregate net assets, 0.72% of the next $200 million, 0.69% of the next
$200 million, 0.66% of the next $200 million, and 0.60% of net assets in
excess of $800 million. If the new rates had not been in effect for a
portion of the fiscal year, the Fund's management fee for its last fiscal
year would have been 0.75% of average annual net assets for both its Class
A and Class C shares.
The Fund pays expenses related to its daily operations, such as
custodian fees, Trustees' fees, transfer agency fees, legal fees and
auditing costs. Those expenses are paid out of the Fund's assets and are
not paid directly by shareholders. However, those expenses reduce the net
asset value of shares, and therefore are indirectly borne by shareholders
through their investment. More information about the Investment Advisory
Agreement and the other expenses paid by the Fund is contained in the
Statement of Additional Information.
There is also information about the Fund's brokerage policies and
practices in "Brokerage Policies of the Fund" in the Statement of
Additional Information. That section discusses how brokers and dealers are
selected for the Fund's portfolio transactions. When deciding which
brokers to use, the Manager is permitted by the Investment Advisory
Agreement to consider whether brokers have sold shares of the Fund or any
other funds for which the Manager serves as investment adviser.
- The Distributor. The Fund's shares are sold through dealers,
brokers and other financial institutions that have a sales agreement with
Oppenheimer Funds Distributor, Inc., a subsidiary of the Manager that acts
as the Fund's Distributor. The Distributor also distributes the shares
of other mutual funds managed by the Manager (the "Oppenheimer funds") and
is sub-distributor for funds managed by a subsidiary of the Manager.
- The Transfer Agent. The Fund's transfer agent is Oppenheimer
Shareholder Services, a division of the Manager, which acts as the
shareholder servicing agent for the Fund and the other Oppenheimer funds
on an "at-cost" basis. Shareholders should direct inquiries about their
accounts to the Transfer Agent at the address and toll-free number shown
below in this Prospectus and on the back cover.
Performance of the Fund
Explanation of Performance Terminology. The Fund uses the terms "total
return" and "average annual total return" to illustrate its performance.
The performance of each class of shares is shown separately, because the
performance of each class will usually be different as a result of the
different kinds of expenses each class bears. These returns measure the
performance of a hypothetical account in the Fund over various periods,
and do not show the performance of each shareholder's account (which will
vary if dividends are received in cash or shares are sold or purchased).
The Fund's performance information may help you see how well your Fund has
done over time and to compare it to other funds or market indices, as we
have done below.
It is important to understand that the Fund's total returns represent
past performance and should not be considered to be predictions of future
returns or performance. This performance data is described below, but
more detailed information about how total returns are calculated is
contained in the Statement of Additional Information, which also contains
information about other ways to measure and compare the Fund's
performance. The Fund's investment performance will vary over time,
depending on market conditions, the composition of the portfolio, expenses
and which class of shares you purchase.
- Total Returns. There are different types of total returns used to
measure the Fund's performance. Total return is the change in value of
a hypothetical investment in the Fund over a given period, assuming 'that
all dividends and capital gains distributions are reinvested in additional
shares. The cumulative total return measures the change in value over the
entire period (for example, ten years). An average annual total return
shows the average rate of return for each year in a period that would
produce the cumulative total return over the entire period. However,
average annual total returns do not show the Fund's actual year-by-year
performance.
When total returns are quoted for Class A shares, they reflect the
payment of the current maximum initial sales charge. When total returns
are shown for Class B shares, they reflect the effect of the contingent
deferred sales charge that applies to the period for which total return
is shown. When total returns are shown for a one-year period for Class
C shares, they reflect the effect of the contingent deferred sales charge.
Total returns may also be quoted "at net asset value," without considering
the effect of the sales charge, and those returns would be reduced if
sales charges were deducted.
How Has the Fund Performed? Below is a discussion by the Manager of the
Fund's performance during its last fiscal year ended September 30, 1994,
followed by a graphical comparison of the Fund's performance to an
appropriate broad-based market index and narrower market index.
- Management's Discussion of Performance. During the Fund's fiscal
year ended September 30, 1994, global securities markets were volatile,
and the Manager sought to increase the Fund's focus on income-producing
investments to enhance current income. The Manager also attempted to
reduce the impact of foreign currency fluctuations by maintaining
investments in high-yield U.S. corporate bonds, reducing the amount of
fixed-income investments in Latin America and Europe and building
positions in Canadian, Australian and New Zealand bonds. During this
period the Fund reduced its positions in Asian markets and Latin America,
regions in which the Manager believed securities values had peaked. The
Manager also reduced positions in financial services and consumer stocks
worldwide, and invested in companies that the Manager believed had strong
earnings potential.
- Comparing the Fund's Performance to the Market. The graphs below
show the performance of a hypothetical $10,000 investment in each Class
of shares of the Fund held until September 30, 1994. In the case of Class
A shares, performance is measured from the inception of the Class on
October 22, 1990, and in the case of Class C shares, from the inception
of the Class on December 1, 1993. Class B shares were not publicly
offered during the fiscal year ended September 30, 1994, and consequently,
no information on Class B shares is included in these graphs.
The Fund's performance is compared to two indices, because the Fund
invests its assets in both stocks and debt securities, and in the
Manager's view, no one index adequately combines both types of investments
globally. Performance is compared to the performance of the Morgan
Stanley Capital International World Index, an unmanaged index of issuers
listed on the stock exchanges of 20 foreign countries and the U.S. It is
widely recognized as a measure of global stock market performance.
Because the Fund also invests in income-producing securities, the Fund's
performance is also compared to the performance of the Lehman Brothers
Aggregate Bond Index, an unmanaged index of U.S. Government Treasury and
agency issues, investment grade corporate bond issues and fixed-rate
mortgage-backed securities. That index is widely regarded as a measure
of the performance of the overall bond market.
Index performance reflects the reinvestment of dividends but does not
consider the effect of capital gains or transaction costs, and none of the
data in the graphs show the effect of taxes. Moreover, index performance
data do not reflect any assessment of the risk of the investments included
in the index. The Fund's performance reflects the effect of Fund business
and operating expenses. While index comparisons may be useful to provide
a benchmark for the Fund's performance, it must be noted that the Fund's
investments are not limited to the securities in the indices shown.
Comparison of Change in Value
of $10,000 Hypothetical Investments in Oppenheimer Global Growth & Income
Fund and the Morgan Stanley Capital International World Index and the
Lehman Aggregate Bond Index
(Graphs)
Oppenheimer Global Growth & Income Fund
<TABLE>
<CAPTION>
Average Annual Total Returns of Cumulative Total Return of Class C
Class A Shares of the Fund at 9/30/94 Shares of the Fund at 9/30/94
- ------------------------------------- ----------------------------------
1-Year Life* Life:**
<S> <C> <C>
7.41% 9.44% 6.41%
<FN>
_____________________
1. The inception date of the Fund (Class A shares) was 10/22/90. The
average annual total returns and the ending account value for Class A
shares in the graph reflect reinvestment of all dividends and capital
gains distributions and are shown net of the 5.75% maximum initial sales
charge.
2. Class C shares of the Fund were first publicly offered on 12/1/93. The
cumulative total return and the ending account value for Class C shares
in the graph reflect reinvestment of all dividends and capital gains
distributions and are shown net of the applicable 1% contingent deferred
sales charge.
Past performance is not predictive of future performance.
Graphs are not drawn to the same scale.
</TABLE>
ABOUT YOUR ACCOUNT
How to Buy Shares
Classes of Shares. The Fund offers investors three different classes of
shares. The different classes of shares represent investments in the same
portfolio of securities but are subject to different expenses and will
likely have different share prices.
- Class A Shares. If you buy Class A shares, you pay an initial sales
charge on investments up to $1 million (up to $500,000 for purchases by
OppenheimerFunds prototype 401(k) plans). If you purchase Class A shares
as part of an investment of at least $1 million ($500,000 for
OppenheimerFunds prototype 401(k) plans) in shares of one or more
Oppenheimer funds, you will not pay an initial sales charge, but if you
sell any of those shares within 18 months of buying them, you may pay a
contingent deferred sales charge. The amount of that sales charge will
vary depending on the amount you invested. Sales charges are described
in "Buying Class A Shares" below.
- Class B Shares. If you buy Class B shares, you pay no sales charge
at the time of purchase, but if you sell your shares within six years of
buying them, you will normally pay a contingent deferred sales charge.
That sales charge varies depending on how long you own your shares. It
is described in "Buying Class B Shares" below.
- Class C Shares. If you buy Class C shares, you pay no sales charge
at the time of purchase, but if you sell your shares within 12 months of
buying them, you will normally pay a contingent deferred sales charge of
1%. It is described in "Buying Class C Shares" below.
Which Class of Shares Should You Choose? Once you decide that the Fund
is an appropriate investment for you, the decision as to which class of
shares is better suited to your needs depends on a number of factors which
you should discuss with your financial advisor. The Fund's operating
costs that apply to a class of shares and the effect of the different
types of sales charges on your investment will vary your investment
results over time. The most important factors are how much you plan to
invest, how long you plan to hold your investment, and whether you
anticipate exchanging your shares for shares of other Oppenheimer funds
(not all of which currently offer Class B or Class C shares). If your
goals and objectives change over time and you plan to purchase additional
shares, you should re-evaluate those factors to see if you should consider
another class of shares.
In the following discussion, to help provide you and your financial
advisor with a framework in which to choose a class, we have made some
assumptions using a hypothetical investment in the Fund. We used the
sales charge rates that apply to each class, considering the effect of the
annual asset-based sales charge on Class B and Class C expenses (which,
like all expenses, will affect your investment return). For the sake of
comparison, we have assumed that there is a 10% rate of appreciation in
the investment each year. Of course, the actual performance of your
investment cannot be predicted and will vary, based on the Fund's actual
investment returns and the operating expenses borne by each class of
shares, and which class you invest in. The factors discussed below are
not intended to be investment advice or recommendations, because each
investor's financial considerations are different. The discussion below
of the factors to consider in purchasing a particular class of shares
assumes that you will purchase only one class of shares and not a
combination of shares of different classes.
- How Long Do You Expect to Hold Your Investment? While future
financial needs cannot be predicted with certainty, knowing how long you
expect to hold your investment will assist you in selecting the
appropriate class of shares. Because of the effect of class-based
expenses, your choice will also depend on how much you plan to invest.
For example, the reduced sales charges available for larger purchases of
Class A shares may, over time, offset the effect of paying an initial
sales charge on your investment (which reduces the amount of your
investment dollars used to buy shares for your account), compared to the
effect over time of higher class-based expenses on Class B or Class C
shares, for which no initial sales charge is paid.
- Investing for the Short Term. If you have a short-term investment
horizon (that is, you plan to hold your shares for not more than six
years), you should probably consider purchasing Class A or Class C shares
rather than Class B shares, because of the effect of the Class B
contingent deferred sales charge if you redeem in less than 7 years, as
well as the effect of the Class B asset-based sales charge on the
investment return for that class in the short-term. Class C shares might
be the appropriate choice (especially for investments of less than
$100,000), because there is no initial sales charge on Class C shares, and
the contingent deferred sales charge does not apply to amounts you sell
after holding them one year.
However, if you plan to invest more than $100,000 for the shorter term,
then the more you invest and the more your investment horizon increases
toward six years, Class C shares might not be as advantageous as Class A
shares. That is because the annual asset-based sales charge on Class C
shares will have a greater impact on your account over the longer term
than the reduced front-end sales charge available for larger purchases of
Class A shares. For example, Class A might be more advantageous than Class
C (as well as Class B) for investments of more than $100,000 expected to
be held for 5 or 6 years (or more). For investments over $250,000 expected
to be held 4 to 6 years (or more), Class A shares may become more
advantageous than Class C (and B). If investing $500,000 or more, Class
A may be more advantageous as your investment horizon approaches 3 years
or more.
And for most investors who invest $1 million or more, in most cases
Class A shares will be the most advantageous choice, no matter how long
you intend to hold your shares. For that reason, the Distributor normally
will not accept purchase orders of $500,000 or $1 million or more of Class
B or Class C shares, respectively, from a single investor.
- Investing for the Longer Term. If you are investing for the longer
term, for example, for retirement, and do not expect to need access to
your money for seven years or more, Class B shares may be an appropriate
consideration, if you plan to invest less than $100,000. If you plan to
invest more than $100,000 over the long term, Class A shares will likely
be more advantageous than Class B shares or C shares, as discussed above,
because of the effect of the expected lower expenses for Class A shares
and the reduced initial sales charges available for larger investments in
Class A shares under the Fund's Right of Accumulation.
Of course, these examples are based on approximations of the effect of
current sales charges and expenses on a hypothetical investment over time,
using the assumed performance return stated above, and therefore, should
not be relied on as rigid guidelines.
- Are There Differences in Account Features That Matter to You?
Because some account features may not be available to Class B or Class C
shareholders, or other features (such as Automatic Withdrawal Plans) might
not be advisable (because of the effect of the contingent deferred sales
charge) for Class B or Class C shareholders, you should carefully review
how you plan to use your investment account before deciding which class
of shares to buy. Also, not all Oppenheimer funds currently offer Class
B or Class C shares, limiting exchangeability from the Fund. Share
certificates are not available for Class C shares, and if you are
considering using your shares as collateral for a loan, that may be a
factor to consider.
- How Does It Affect Payments to My Broker? A salesperson, such as
a broker, or any other person who is entitled to receive compensation for
selling Fund shares may receive different compensation for selling one
class than for selling another class. It is important that investors
understand that the purpose of the Class B and Class C contingent deferred
sales charges and asset-based sales charge is the same as the purpose of
the front-end sales charge on sales of Class A shares: that is, to
compensate the Distributor for commissions it pays to dealers and
financial institutions for selling shares.
How Much Must You Invest? You can open a Fund account with a minimum
initial investment of $1,000 and make additional investments at any time
with as little as $25. There are reduced minimum investments under special
investment plans.
With Asset Builder Plans, Automatic Exchange Plans, 403(b)(7)
custodial plans and military allotment plans, you can make initial and
subsequent investments of as little as $25; and subsequent purchases of
at least $25 can be made by telephone through AccountLink.
Under pension and profit-sharing plans and Individual Retirement
Accounts (IRAs), you can make an initial investment of as little as $250
(if your IRA is established under an Asset Builder Plan, the $25 minimum
applies), and subsequent investments may be as little as $25.
There is no minimum investment requirement if you are buying shares
by reinvesting dividends from the Fund or other Oppenheimer funds (a list
of them appears in the Statement of Additional Information, or you can ask
your dealer or call the Transfer Agent), or by reinvesting distributions
from unit investment trusts that have made arrangements with the
Distributor.
- How Are Shares Purchased? You can buy shares several ways --
through any dealer, broker or financial institution that has a sales
agreement with the Distributor, directly through the Distributor, or
automatically from your bank account through an Asset Builder Plan under
the OppenheimerFunds AccountLink service. When you buy shares, be sure to
specify Class A, Class B or Class C shares. If you do not choose, your
investment will be made in Class A shares.
- Buying Shares Through Your Dealer. Your dealer will place your order
with the Distributor on your behalf.
- Buying Shares Through the Distributor. Complete an OppenheimerFunds
New Account Application and return it with a check payable to "Oppenheimer
Funds Distributor, Inc." Mail it to P.O. Box 5270, Denver, Colorado 80217.
If you don't list a dealer on the application, the Distributor will act
as your agent in buying the shares. However, it is recommended that you
discuss your investment first with a financial advisor, to be sure that
it is appropriate for you.
- Buying Shares Through OppenheimerFunds AccountLink. You can use
AccountLink to link your Fund account with an account at a U.S. bank or
other financial institution that is an Automated Clearing House (ACH)
member. You can then transmit funds electronically to purchase shares,
to have the Transfer Agent send redemption proceeds, or to transmit
dividends and distributions.
Shares are purchased for your account on the regular business day the
Distributor is instructed by you to initiate the ACH transfer to buy
shares. You can provide those instructions automatically, under an Asset
Builder Plan, described below, or by telephone instructions using
OppenheimerFunds PhoneLink, also described below. You should request
AccountLink privileges on the application or dealer settlement
instructions used to establish your account. Please refer to "AccountLink"
below for more details.
- Asset Builder Plans. You may purchase shares of the Fund (and up to
four other Oppenheimer funds) automatically each month from your account
at a bank or other financial institution under an Asset Builder Plan with
AccountLink. Details are on the Application and in the Statement of
Additional Information.
- At What Price Are Shares Sold? Shares are sold at the public
offering price based on the net asset value (and any initial sales charge
that applies) that is next determined after the Distributor receives the
purchase order in Denver, Colorado. In most cases, to enable you to
receive that day's offering price, the Distributor must receive your order
by the time of day The New York Stock Exchange closes, which is normally
4:00 P.M., New York time, but may be earlier on some days (all references
to time in this Prospectus mean "New York time"). The net asset value of
each class of shares is determined as of that time on each day The New
York Stock Exchange is open (which is a "regular business day").
If you buy shares through a dealer, the dealer must receive your order
by the close of The New York Stock Exchange on a regular business day and
transmit it to the Distributor so that it is received before the
Distributor's close of business that day, which is normally 5:00 P.M. The
Distributor may reject any purchase order for the Fund's shares, in its
sole discretion.
Buying Class A Shares. Class A shares are sold at their offering price,
which is normally net asset value plus an initial sales charge. However,
in some cases, described below, purchases are not subject to an initial
sales charge, and the offering price will be the net asset value. In some
cases, reduced sales charges may be available, as described below. Out
of the amount you invest, the Fund receives the net asset value to invest
for your account. The sales charge varies depending on the amount of your
purchase. A portion of the sales charge may be retained by the
Distributor and allocated to your dealer. The current sales charge rates
and commissions paid to dealers and brokers are as follows:
<TABLE>
<CAPTION>
Front-End Sales Charge Commission as
As a Percentage of: Percentage of
Amount of Purchase Offering Price Amount Invested Offering Price
- ------------------ -------------- --------------- --------------
<S> <C> <C> <C>
Less than $25,000 5.75% 6.10% 4.75%
$25,000 or more but
less than $50,000 5.50% 5.82% 4.75%
$50,000 or more but
less than $100,000 4.75% 4.99% 4.00%
$100,000 or more but
less than $250,000 3.75% 3.90% 3.00%
$250,000 or more but
less than $500,000 2.50% 2.56% 2.00%
$500,000 or more but
less than $1 million 2.00% 2.04% 1.60%
</TABLE>
________________________
The Distributor reserves the right to reallow the entire commission to
dealers. If that occurs, the dealer may be considered an "underwriter"
under Federal securities laws.
- Class A Contingent Deferred Sales Charge. There is no initial sales
charge on purchases of Class A shares of any one or more of the
Oppenheimer funds in the following cases:
- Purchases aggregating $1 million or more; or
- Purchases by an OppenheimerFunds prototype 401(k) plan that (1) buys
shares costing $500,000 or more, or (2) has, at the time of purchase, 100
or more eligible participants, or (3) certifies that it projects to have
annual plan purchases of $200,000 or more.
Shares of any of the Oppenheimer funds that offers only one class of
shares that has no class designation are considered "Class A shares" for
this purpose. The Distributor pays dealers of record commissions on these
purchases in an amount equal to the sum of 1.0% of the first $2.5 million,
plus 0.50% of the next $2.5 million, plus 0.25% of purchases over $5
million. That commission will be paid only on the amount of those
purchases in excess of $1 million ($500,000, for purchases by
OppenheimerFunds prototype 401(k) plans) that were not previously subject
to a front-end sales charge and dealer commission.
If you redeem any of those shares within 18 months of the end of the
calendar month of their purchase, a contingent deferred sales charge
(called the "Class A contingent deferred sales charge") may be deducted
from the redemption proceeds. That sales charge will be equal to 1.0% of
either (1) the aggregate net asset value of the redeemed shares (not
including shares purchased by reinvestment of dividends or capital gain
distributions) or (2) the original cost of the shares, whichever is less.
However, the Class A contingent deferred sales charge will not exceed the
aggregate amount of the commissions the Distributor paid to your dealer
on all Class A shares of all Oppenheimer funds you purchased subject to
the Class A contingent deferred sales charge.
In determining whether a contingent deferred sales charge is payable,
the Fund will first redeem shares that are not subject to the sales
charge, including shares purchased by reinvestment of dividends and
capital gains, and then will redeem other shares in the order that you
purchased them. The Class A contingent deferred sales charge is waived
in certain cases described in "Waivers of Class A Sales Charges" below.
No Class A contingent deferred sales charge is charged on exchanges of
shares under the Fund's Exchange Privilege (described below). However,
if the shares acquired by exchange are redeemed within 18 months of the
end of the calendar month of the purchase of the exchanged shares, the
sales charge will apply.
- Special Arrangements With Dealers. The Distributor may advance up
to 13 months' commissions to dealers that have established special
arrangements with the Distributor for Asset Builder Plans for their
clients. Dealers whose sales of Class A shares of Oppenheimer funds
(other than money market funds) under OppenheimerFunds-sponsored 403(b)(7)
custodial plans exceed $5 million per year (calculated per quarter), will
receive monthly one-half of the Distributor's retained commissions on
those sales, and if those sales exceed $10 million per year, those dealers
will receive the Distributor's entire retained commission on those sales.
Reduced Sales Charges for Class A Share Purchases. You may be eligible
to buy Class A shares at reduced sales charge rates in one or more of the
following ways:
- Right of Accumulation. To qualify for the lower sales charge rates
that apply to larger purchases of Class A shares, you and your spouse can
add together Class A and Class B shares you purchase for your individual
accounts, or jointly, or for trust or custodial accounts on behalf of your
children who are minors. A fiduciary can count all shares purchased for
a trust, estate or other fiduciary account (including one or more employee
benefit plans of the same employer) that has multiple accounts.
Additionally, you can add together current purchases of Class A and
Class B shares of the Fund and other Oppenheimer funds to reduce the sales
charge rate that applies to current purchases of Class A shares. You can
also include Class A and Class B shares of Oppenheimer funds you
previously purchased subject to an initial or contingent deferred sales
charge to reduce the sales charge rate for current purchases of Class A
shares, provided that you still hold your investment in one of the
Oppenheimer funds. The value of those shares will be based on the greater
of the amount you paid for the shares or their current value (at offering
price). The Oppenheimer funds are listed in "Reduced Sales Charges" in
the Statement of Additional Information, or a list can be obtained from
the Distributor. The reduced sales charge will apply only to current
purchases and must be requested when you buy your shares.
- Letter of Intent. Under a Letter of Intent, if you purchase Class
A shares or Class A and Class B shares of the Fund and other Oppenheimer
funds during a 13-month period, you can reduce the sales charge rate that
applies to your purchases of Class A shares. The total amount of your
intended purchases of both Class A and Class B shares will determine the
reduced sales charge rate for the Class A shares purchased during that
period. This can include purchases made up to 90 days before the date of
the Letter. More information is contained in the Application and in
"Reduced Sales Charges" in the Statement of Additional Information.
- Waivers of Class A Sales Charges. The Class A sales charges are not
imposed in the circumstances described below. There is an explanation of
this policy in "Reduced Sales Charges" in the Statement of Additional
Information.
Waivers of Initial and Contingent Deferred Sales Charges for Certain
Purchasers. Class A shares purchased by the following investors are not
subject to any Class A sales charges:
- the Manager or its affiliates;
- present or former officers, directors, trustees and employees (and
their "immediate families" as defined in "Reduced Sales Charges" in the
Statement of Additional Information) of the Fund, the Manager and its
affiliates, and retirement plans established by them for their employees;
- registered management investment companies, or separate accounts of
insurance companies having an agreement with the Manager or the
Distributor for that purpose;
- dealers or brokers that have a sales agreement with the Distributor,
if they purchase shares for their own accounts or for retirement plans for
their employees;
- employees and registered representatives (and their spouses) of
dealers or brokers described above or financial institutions that have
entered into sales arrangements with such dealers or brokers (and are
identified to the Distributor) or with the Distributor; the purchaser must
certify to the Distributor at the time of purchase that the purchase is
for the purchaser's own account (or for the benefit of such employee's
spouse or minor children);
- dealers, brokers or registered investment advisers that have
entered into an agreement with the Distributor providing specifically for
the use of shares of the Fund in particular investment products made
available to their clients; (those clients may be charged a transaction
fee by their dealer, broker or adviser for the purchase or sale of Fund
shares) or
- dealers, brokers or registered investment advisers that have entered
into an agreement with the Distributor to sell shares to defined
contribution employee retirement plans for which the dealer, broker or
investment adviser provides administration services.
Waivers of Initial and Contingent Deferred Sales Charges in Certain
Transactions. Class A shares issued or purchased in the following
transactions are not subject to Class A sales charges:
- shares issued in plans of reorganization, such as mergers, asset
acquisitions and exchange offers, to which the Fund is a party;
- shares purchased by the reinvestment of loan repayments by a
participant in a retirement plan for which the Manager or its affiliates
acts as sponsor;
- shares purchased by the reinvestment of dividends or other
distributions reinvested from the Fund or other Oppenheimer funds (other
than Oppenheimer Cash Reserves) or unit investment trusts for which
reinvestment arrangements have been made with the Distributor; or
- shares purchased and paid for with the proceeds of shares redeemed
in the past 12 months from a mutual fund (other than a fund managed by the
Manager or any of its subsidiaries) on which an initial sales charge or
contingent sales charge was paid (this waiver also applies to shares
purchased by exchange of shares of Oppenheimer Money Market Fund, Inc.
that were purchased and paid for in this manner); this waiver must be
requested when the purchase order is placed for your shares of the Fund,
and the Distributor may require evidence of your qualification for this
waiver.
Waivers of the Class A Contingent Deferred Sales Charge for Certain
Redemptions. The Class A contingent deferred sales charge is also waived
if shares that would otherwise be subject to the contingent deferred sales
charge are redeemed in the following cases:
- for retirement distributions or loans to participants or
beneficiaries from qualified retirement plans, deferred compensation plans
or other employee benefit plans, including OppenheimerFunds prototype
401(k) plans (these are all referred to as "Retirement Plans");
- to return excess contributions made to Retirement Plans;
- to make Automatic Withdrawal Plan payments that are limited annually
to no more than 12% of the original account value;
- involuntary redemptions of shares by operation of law or involuntary
redemptions of small accounts (see "Shareholder Account Rules and
Policies," below);
- if, at the time a purchase order is placed for Class A shares that
would otherwise be subject to the Class A contingent deferred sales
charge, the dealer agrees in writing to accept the dealer's portion of the
commission payable on the sale in installments of 1/18th of the commission
per month (and no further commission will be payable if the shares are
redeemed within 18 months of purchase); or
- for distributions from OppenheimerFunds prototype 401(k) plans for
any of the following cases or purposes: (1) following death or disability
(as defined in the Internal Revenue Code) of the participant or
beneficiary (the death or disability must occur after the participant's
account was established); (2) hardship withdrawals, as defined in the
plan; (3) under a Qualified Domestic Relations Order, as defined in the
Internal Revenue Code; (4) to meet the minimum distribution requirements
of the Internal Revenue Code; (5) to establish "substantially equal
periodic payments" as described in Section 72(t) of the Internal Revenue
Code, or (6) separation from service.
- Service Plan for Class A Shares. The Fund has adopted a Service
Plan for Class A shares to reimburse the Distributor for a portion of its
costs incurred in connection with the personal service and maintenance of
shareholder accounts that hold Class A shares. Reimbursement is made
quarterly at an annual rate that may not exceed 0.25% of the average
annual net assets of Class A shares of the Fund. The Distributor uses all
of those fees to compensate dealers, brokers, banks and other financial
institutions quarterly for providing personal service and maintenance of
accounts of their customers that hold Class A shares and to reimburse
itself (if the Fund's Board of Trustees authorizes such reimbursements,
which it has not yet done) for its other expenditures under the Plan.
Services to be provided include, among others, answering customer
inquiries about the Fund, assisting in establishing and maintaining
accounts in the Fund, making the Fund's investment plans available and
providing other services at the request of the Fund or the Distributor.
Payments are made by the Distributor quarterly at an annual rate not to
exceed 0.25% of the average annual net assets of Class A shares held in
accounts of the dealer or its customers. The payments under the Plan
increase the annual expenses of Class A shares. For more details, please
refer to "Distribution and Service Plans" in the Statement of Additional
Information.
Buying Class B Shares. Class B shares are sold at net asset value per
share without an initial sales charge. However, if Class B shares are
redeemed within 6 years of their purchase, a contingent deferred sales
charge will be deducted from the redemption proceeds. That sales charge
will not apply to shares purchased by the reinvestment of dividends or
capital gains distributions. The charge will be assessed on the lesser of
the net asset value of the shares at the time of redemption or the
original purchase price. The contingent deferred sales charge is not
imposed on the amount of your account value represented by the increase
in net asset value over the initial purchase price (including increases
due to the reinvestment of dividends and capital gains distributions). The
Class B contingent deferred sales charge is paid to the Distributor to
reimburse its expenses of providing distribution-related services to the
Fund in connection with the sale of Class B shares.
To determine whether the contingent deferred sales charge applies to
a redemption, the Fund redeems shares in the following order: (1) shares
acquired by reinvestment of dividends and capital gains distributions, (2)
shares held for over 6 years, and (3) shares held the longest during the
6-year period. The contingent deferred sales charge is not imposed in the
circumstances described in "Waivers of Class B and Class C Sales Charges"
below.
The amount of the contingent deferred sales charge will depend on the
number of years since you invested and the dollar amount being redeemed,
according to the following schedule:
<TABLE>
<CAPTION>
Contingent Deferred Sales Charge
Years Since Beginning of Month In on Redemptions in that Year
Which Purchase Order Was Accepted As % of Amount Subject to Charge)
- --------------------------------- --------------------------------
<S> <C>
0 - 1 5.0%
1 - 2 4.0%
2 - 3 3.0%
3 - 4 3.0%
4 - 5 2.0%
5 - 6 1.0%
6 and following None
</TABLE>
In the table, a "year" is a 12-month period. All purchases are
considered to have been made on the first regular business day of the
month in which the purchase was made.
- Automatic Conversion of Class B Shares. 72 months after you
purchase Class B shares, those shares will automatically convert to Class
A shares. This conversion feature relieves Class B shareholders of the
asset-based sales charge that applies to Class B shares under the Class
B Distribution and Service Plan, described below. The conversion is based
on the relative net asset value of the two classes, and no sales load or
other charge is imposed. When Class B shares convert, any other Class B
shares that were acquired by the reinvestment of dividends and
distributions on the converted shares will also convert to Class A shares.
The conversion feature is subject to the continued availability of a tax
ruling described in "Alternative Sales Arrangements - Class A and Class
B Shares" in the Statement of Additional Information.
- Distribution and Service Plan for Class B Shares. The Fund has
adopted a Distribution and Service Plan for Class B shares to compensate
the Distributor for distributing Class B shares and servicing accounts.
Under the Plan, the Fund pays the Distributor an annual "asset-based sales
charge" of 0.75% per year on Class B shares that are outstanding for 6
years or less. The Distributor also receives a service fee of 0.25% per
year. Both fees are computed on the average annual net assets of Class
B shares, determined as of the close of each regular business day. The
asset-based sales charge allows investors to buy Class B shares without
a front-end sales charge while allowing the Distributor to compensate
dealers that sell Class B shares.
The Distributor uses the service fee to compensate dealers for
providing personal services for accounts that hold Class B shares. Those
services are similar to those provided under the Class A Service Plan,
described above. The asset-based sales charge and service fee increase
Class B expenses by 1.00% of average net assets per year.
The Distributor pays the 0.25% service fee to dealers in advance for
the first year after Class B shares have been sold by the dealer. After
the shares have been held for a year, the Distributor pays the fee on a
quarterly basis. The Distributor pays sales commissions of 3.75% of the
purchase price to dealers from its own resources at the time of sale.
The Fund pays the asset-based sales charge to the Distributor for its
services rendered in connection with the distribution of Class B shares.
Those payments, retained by the Distributor, are at a fixed rate which is
not related to the Distributor's expenses. The services rendered by the
Distributor include paying and financing the payment of sales commissions,
service fees, and other costs of distributing and selling Class B shares.
If the Plan is terminated by the Fund, the Board of Trustees may allow the
Fund to continue payments of the asset-based sales charge to the
Distributor for distributing Class B shares before the Plan was
terminated.
- Waivers of Class B and Class C Sales Charges. The Class B and Class
C contingent deferred sales charges will not be applied to shares
purchased in certain types of transactions nor will it apply to shares
redeemed in certain circumstances as described below. The reasons for
this policy are in "Reduced Sales Charges" in the Statement of Additional
Information.
Waivers for Redemptions in Certain Cases. The Class B and Class C
contingent deferred sales charges will be waived for redemptions of shares
in the following cases:
- distributions to participants or beneficiaries from Retirement Plans,
if the distributions are made (a) under an Automatic Withdrawal Plan after
the participant reaches age 59-1/2, as long as the payments are no more
than 10% of the account value annually (measured from the date the
Transfer Agent receives the request), or (b) following the death or
disability (as defined in the Internal Revenue Code) of the participant
or beneficiary (the death or disability must have occurred after the
account was established);
- redemptions from accounts other than Retirement Plans following the
death or disability of the last surviving shareholder (the death or
disability must have occurred after the account was established, and for
disability you must provide evidence of a determination of disability by
the Social Security Administration);
- returns of excess contributions to Retirement Plans;
- distributions from IRAs (including SEP-IRAs and SAR/SEP accounts)
before the participant is age 59-1/2, and distributions from 403(b)(7)
custodial plans or pension or profit sharing plans before the participant
is age 59-1/2 but only after the participant has separated from service,
if the distributions are made in substantially equal periodic payments
over the life (or life expectancy) of the participant or the joint lives
(or joint life and last survivor expectancy) of the participant and the
participant's designated beneficiary (and the distributions must comply
with other requirements for such distributions under the Internal Revenue
Code and may not exceed 10% of the account value annually, measured from
the date the Transfer Agent receives the request); and
- distributions from OppenheimerFunds prototype 401(k) plans (1) for
hardship withdrawals; (2) under a Qualified Domestic Relations Order, as
defined in the Internal Revenue Code; (3) to meet minimum distribution
requirements as defined in the Internal Revenue Code; (4) to make
"substantially equal periodic payments" as described in Section 72(t) of
the Internal Revenue Code; or (5) for separation from service.
Waivers for Shares Sold or Issued in Certain Transactions. The
contingent deferred sales charge is also waived on Class B and Class C
shares sold or issued in the following cases:
- shares sold to the Manager or its affiliates;
- shares sold to registered management investment companies or separate
accounts of insurance companies having an agreement with the Manager or
the Distributor for that purpose;
- shares issued in plans of reorganization to which the Fund is a
party; and
- shares redeemed involuntarily, as described in "Shareholder Account
Rules and Policies," below.
Buying Class C Shares. Class C shares are sold at net asset value per
share without an initial sales charge. However, if Class C shares are
redeemed within 12 months of their purchase, a contingent deferred sales
charge of 1.0% will be deducted from the redemption proceeds. That sales
charge will not apply to shares purchased by the reinvestment of dividends
or capital gains distributions. The charge will be assessed on the lesser
of the net asset value of the shares at the time of redemption or the
original purchase price. The contingent deferred sales charge is not
imposed on the amount of your account value represented by the increase
in net asset value over the initial purchase price (including increases
due to the reinvestment of dividends and capital gains distributions). The
Class C contingent deferred sales charge is paid to the Distributor to
reimburse its expenses of providing distribution-related services to the
Fund in connection with the sale of Class C shares.
To determine whether the contingent deferred sales charge applies to
a redemption, the Fund redeems shares in the following order: (1) shares
acquired by reinvestment of dividends and capital gains distributions, (2)
shares held for over 12 months, and (3) shares held the longest during the
12-month period.
- Waivers of Class C Sales Charge. The Class C contingent deferred
sales charge will be waived if the shareholder requests for any of the
redemptions or circumstances described above under "Waivers of Class B and
Class C Contingent Deferred Sales Charges."
- Distribution and Service Plan for Class C Shares. The Fund has
adopted a Distribution and Service Plan for Class C shares to compensate
the Distributor for distributing Class C shares and servicing accounts.
Under the Plan, the Fund pays the Distributor an annual "asset-based sales
charge" of 0.75% per year on Class C shares. The Distributor also
receives a service fee of 0.25% per year. Both fees are computed on the
average annual net assets of Class C shares, determined as of the close
of each regular business day. The asset-based sales charge allows
investors to buy Class C shares without a front-end sales charge while
allowing the Distributor to compensate dealers that sell Class C shares.
The Distributor uses the service fee to compensate dealers for
providing personal services for accounts that hold Class C shares. Those
services are similar to the services provided under the Class A Service
Plan, described above. The asset-based sales charge and service fees
increase Class C expenses by up to 1.00% of average net assets per year.
The Distributor pays the 0.25% service fee to dealers in advance for
the first year, after Class C shares have been sold by the dealer. After
the shares have been held for a year, the Distributor pays the fee on a
quarterly basis. The Distributor pays sales commissions of 0.75% of the
purchase price to dealers from its own resources at the time of sale. The
total up-front commission paid by the Distributor to the dealer at the
time of sale of Class C shares is 1.00% of the purchase price. The
Distributor plans to pay the asset-based sales charge as an ongoing
commission to the dealer on Class C shares that have been outstanding for
a year or more.
The Distributor's actual expenses in selling Class C shares may be
more than the payments it receives from contingent deferred sales charges
collected on redeemed shares and from the Fund under the Distribution and
Service Plan for Class C shares. Therefore, those expenses may be carried
over and paid in future years. At September 30, 1994, the end of the Plan
year, the Distributor had incurred unreimbursed expenses under the Plan
of $195,526 (equal to 1.15% of the Fund's net assets represented by Class
C shares on that date), which have been carried over into the present Plan
year. If the Plan is terminated by the Fund, the Board of Trustees may
allow the Fund to continue payments of the asset-based sales charge to the
Distributor for certain expenses it incurred before the plan was
terminated.
Special Investor Services
AccountLink. OppenheimerFunds AccountLink links your Fund account to your
account at your bank or other financial institution to enable you to send
money electronically between those accounts to perform a number of types
of account transactions. These include purchases of shares by telephone
(either through a service representative or by PhoneLink, described
below), automatic investments under Asset Builder Plans, and sending
dividends and distributions or Automatic Withdrawal Plan payments directly
to your bank account. Please refer to the Application for details or call
the Transfer Agent for more information.
AccountLink privileges must be requested on the Application you use to
buy shares, or on your dealer's settlement instructions if you buy your
shares through your dealer. After your account is established, you can
request AccountLink privileges by sending signature-guaranteed
instructions to the Transfer Agent. AccountLink privileges will apply to
each shareholder listed in the registration on your account as well as to
your dealer representative of record unless and until the Transfer Agent
receives written instructions terminating or changing those privileges.
After you establish AccountLink for your account, any change of bank
account information must be made by signature-guaranteed instructions to
the Transfer Agent signed by all shareholders who own the account.
- Using AccountLink to Buy Shares. Purchases may be made by telephone
only after your account has been established. To purchase shares in
amounts up to $250,000 through a telephone representative, call the
Distributor at 1-800-852-8457. The purchase payment will be debited from
your bank account.
- PhoneLink. PhoneLink is the Oppenheimer funds automated telephone
system that enables shareholders to perform a number of account
transactions automatically using a touch-tone phone. PhoneLink may be
used on already-established Fund accounts after you obtain a Personal
Identification Number (PIN), by calling the special PhoneLink number: 1-
800-533-3310.
- Purchasing Shares. You may purchase shares in amounts up to
$100,000 by phone, by calling 1-800-533-3310. You must have established
AccountLink privileges to link your bank account with the Fund, to pay for
these purchases.
- Exchanging Shares. With the OppenheimerFunds Exchange Privilege,
described below, you can exchange shares automatically by phone from your
Fund account to another Oppenheimer funds account you have already
established by calling the special PhoneLink number. Please refer to "How
to Exchange Shares," below, for details.
- Selling Shares. You can redeem shares by telephone automatically
by calling the PhoneLink number and the Fund will send the proceeds
directly to your AccountLink bank account. Please refer to "How to Sell
Shares," below, for details.
Automatic Withdrawal and Exchange Plans. The Fund has several plans that
enable you to sell shares automatically or exchange them to another
Oppenheimer funds account on a regular basis:
- Automatic Withdrawal Plans. If your Fund account is worth $5,000 or
more, you can establish an Automatic Withdrawal Plan to receive payments
of at least $50 on a monthly, quarterly, semi-annual or annual basis. The
checks may be sent to you or sent automatically to your bank account on
AccountLink. You may even set up certain types of withdrawals of up to
$1,500 per month by telephone. You should consult the Application and
Statement of Additional Information for more details.
- Automatic Exchange Plans. You can authorize the Transfer Agent to
exchange automatically an amount you establish in advance for shares of
up to five other Oppenheimer funds on a monthly, quarterly, semi-annual
or annual basis under an Automatic Exchange Plan. The minimum purchase
for each Oppenheimer funds account is $25. These exchanges are subject
to the terms of the Exchange Privilege, described below.
Reinvestment Privilege. If you redeem some or all of your Class A shares
of the Fund, you have up to 6 months to reinvest all or part of the
redemption proceeds in Class A shares of the Fund or other Oppenheimer
funds without paying a sales charge. This privilege applies to Class A
shares that you purchased with an initial sales charge and to Class A or
Class B shares on which you paid a contingent deferred sales charge when
you redeemed them. It does not apply to Class C shares. You must be sure
to ask the Distributor for this privilege when you send your payment.
Please consult the Statement of Additional Information for more details.
Retirement Plans. Fund shares are available as an investment for your
retirement plans. If you participate in a plan sponsored by your employer,
the plan trustee or administrator must make the purchase of shares for
your retirement plan account. The Distributor offers a number of different
retirement plans that can be used by individuals and employers:
- Individual Retirement Accounts including rollover IRAs, for
individuals and their spouses
- 403(b)(7) Custodial Plans for employees of eligible tax-exempt
organizations, such as schools, hospitals and charitable organizations
- SEP-IRAs (Simplified Employee Pension Plans) for small business
owners or people with income from self-employment, including SARSEP-IRAs
- Pension and Profit-Sharing Plans for self-employed persons and other
employers
- 401(k) Prototype Retirement Plans for businesses
Please call the Distributor for the OppenheimerFunds plan documents,
which contain important information and applications.
How to Sell Shares
You can arrange to take money out of your account on any regular
business day by selling (redeeming) some or all of your shares. Your
shares will be sold at the next net asset value calculated after your
order is received and accepted by the Transfer Agent. The Fund offers you
a number of ways to sell your shares: in writing or by telephone. You can
also set up Automatic Withdrawal Plans to redeem shares on a regular
basis, as described above. If you have questions about any of these
procedures, and especially if you are redeeming shares in a special
situation, such as due to the death of the owner, or from a retirement
plan, please call the Transfer Agent first at 1-800-525-7048, for
assistance.
- Retirement Accounts. To sell shares in an OppenheimerFunds
retirement account in your name, call the Transfer Agent for a
distribution request form. There are special income tax withholding
requirements for distributions from retirement plans and you must submit
a withholding form with your request to avoid delay. If your retirement
plan account is held for you by your employer, you must arrange for the
distribution request to be sent by the plan administrator or trustee.
There are additional details in the Statement of Additional Information.
- Certain Requests Require a Signature Guarantee. To protect you and
the Fund from fraud, certain redemption requests must be in writing and
must include a signature guarantee in the following situations (there may
be other situations also requiring a signature guarantee):
- You wish to redeem more than $50,000 worth of shares and receive a
check
- The redemption check is not payable to all shareholders listed on the
account statement
- The redemption check is not sent to the address of record on your
statement
- Shares are being transferred to a Fund account with a different owner
or name
- Shares are redeemed by someone other than the owners (such as an
Executor)
- Where Can I Have My Signature Guaranteed? The Transfer Agent will
accept a guarantee of your signature by a number of financial
institutions, including: a U.S. bank, trust company, credit union or
savings association, or by a foreign bank that has a U.S. correspondent
bank, or by a U.S. registered dealer or broker in securities, municipal
securities or government securities, or by a U.S. national securities
exchange, a registered securities association or a clearing agency. If you
are signing on behalf of a corporation, partnership or other business, or
as a fiduciary, you must also include your title in the signature.
Selling Shares by Mail. Write a "letter of instructions" that includes:
- Your name
- The Fund's name
- Your Fund account number (from your account statement)
- The dollar amount or number of shares to be redeemed
- Any special payment instructions
- Any share certificates for the shares you are selling
- The signatures of all registered owners exactly as the account is
registered, and
- Any special requirements or documents requested by the Transfer Agent
to assure proper authorization of the person asking to sell shares.
Use the following address for requests by mail:
Oppenheimer Shareholder Services
P.O. Box 5270, Denver, Colorado 80217
Send courier or Express Mail requests to:
Oppenheimer Shareholder Services
10200 E. Girard Avenue, Building D
Denver, Colorado 80231
Selling Shares by Telephone. You and your dealer representative of record
may also sell your shares by telephone. To receive the redemption price
on a regular business day, your call must be received by the Transfer
Agent by the close of The New York Stock Exchange that day, which is
normally 4:00 P.M., but may be earlier on some days. You may not redeem
shares held in an OppenheimerFunds retirement plan or under a share
certificate by telephone.
- To redeem shares through a service representative, call 1-800-852-
8457
- To redeem shares automatically on PhoneLink, call 1-800-533-3310
Whichever method you use, you may have a check sent to the address on
the account statement, or, if you have linked your Fund account to your
bank account on AccountLink, you may have the proceeds sent to that bank
account.
- Telephone Redemptions Paid by Check. Up to $50,000 may be redeemed
by telephone, once in any 7-day period. The check must be payable to all
owners of record of the shares and must be sent to the address on the
account statement. This service is not available within 30 days of
changing the address on an account.
- Telephone Redemptions Through AccountLink. There are no dollar
limits on telephone redemption proceeds sent to a bank account designated
when you establish AccountLink. Normally the ACH transfer to your bank
is initiated on the business day after the redemption. You do not receive
dividends on the proceeds of the shares you redeemed while they are
waiting to be transferred.
Selling Shares Through Your Dealer. The Distributor has made arrangements
to repurchase Fund shares from dealers and brokers on behalf of their
customers. Brokers or dealers may charge for that service. Please refer
to "Special Arrangements for Repurchase of Shares from Dealers and
Brokers" in the Statement of Additional Information for more details.
How to Exchange Shares
Shares of the Fund may be exchanged for shares of certain Oppenheimer
funds at net asset value per share at the time of exchange, without sales
charge. To exchange shares, you must meet several conditions:
- Shares of the fund selected for exchange must be available for sale
in your state of residence
- The prospectuses of this Fund and the fund whose shares you want to
buy must offer the exchange privilege
- You must hold the shares you buy when you establish your account for
at least 7 days before you can exchange them; after the account is open
7 days, you can exchange shares every regular business day
- You must meet the minimum purchase requirements for the fund you
purchase by exchange
- Before exchanging into a fund, you should obtain and read its
prospectus
Shares of a particular class may be exchanged only for shares of the
same class in the other Oppenheimer funds. For example, you can exchange
Class A shares of this Fund only for Class A shares of another fund. At
present, not all of the Oppenheimer funds offer Class B and Class C
shares. A list showing which Funds offer which classes can be obtained
by calling the Distributor at 1-800-525-7048. If a fund has only one
class of shares that does not have a class designation, they are "Class
A" shares for exchange purposes. Certain Oppenheimer funds offer Class A
shares and Class B or Class C shares, and a list can be obtained by
calling the Distributor at 1-800-525-7048. In some cases, sales charges
may be imposed on exchange transactions. Please refer to "How to Exchange
Shares" in the Statement of Additional Information for more details.
Exchanges may be requested in writing or by telephone:
- Written Exchange Requests. Submit an OppenheimerFunds Exchange
Request form, signed by all owners of the account. Send it to the
Transfer Agent at the addresses listed in "How to Sell Shares."
- Telephone Exchange Requests. Telephone exchange requests may be made
either by calling a service representative at 1-800-852-8457 or by using
PhoneLink for automated exchanges, by calling 1-800-533-3310. Telephone
exchanges may be made only between accounts that are registered with the
same name(s) and address. Shares held under certificates may not be
exchanged by telephone.
You can find a list of Oppenheimer funds currently available for
exchanges in the Statement of Additional Information or obtain one by
calling a service representative at 1-800-525-7048. That list can change
from time to time.
There are certain exchange policies you should be aware of:
- Shares are normally redeemed from one fund and purchased from the
other fund in the exchange transaction on the same regular business day
on which the Transfer Agent receives an exchange request that is in proper
form by the close of The New York Stock Exchange that day, which is
normally 4:00 P.M., but may be earlier on some days. However, either fund
may delay the purchase of shares of the fund you are exchanging into up
to 7 days if it determines it would be disadvantaged by a same-day
transfer of the proceeds to buy shares. For example, the receipt of
multiple exchange requests from a dealer in a "market-timing" strategy
might require the sale of portfolio securities at a time or price
disadvantageous to the Fund.
- Because excessive trading can hurt fund performance and harm
shareholders, the Fund reserves the right to refuse any exchange request
that will disadvantage it, or to refuse multiple exchange requests
submitted by a shareholder or dealer.
- The Fund may amend, suspend or terminate the exchange privilege at
any time. Although the Fund will attempt to provide you notice whenever
it is reasonably able to do so, it may impose these changes at any time.
- For tax purposes, exchanges of shares involve a redemption of the
shares of the Fund you own and a purchase of the shares of the other fund,
which may result in a capital gain or loss. For more information about
taxes affecting exchanges, please refer to "How to Exchange Shares" in the
Statement of Additional Information.
- If the Transfer Agent cannot exchange all the shares you request
because of a restriction cited above, only the shares eligible for
exchange will be exchanged.
Shareholder Account Rules and Policies
- Net Asset Value Per Share is determined for each class of shares as
of the close of The New York Stock Exchange on each regular business day
by dividing the value of the Fund's net assets attributable to a class by
the number of shares of that class that are outstanding. The Fund's Board
of Trustees has established procedures to value the Fund's securities to
determine net asset value. In general, securities values are based on
market value. There are special procedures for valuing illiquid and
restricted securities, obligations for which market values cannot be
readily obtained, and call options and hedging instruments. These
procedures are described more completely in the Statement of Additional
Information.
- The offering of shares may be suspended during any period in which
the determination of net asset value is suspended, and the offering may
be suspended by the Board of Trustees at any time the Board believes it
is in the Fund's best interest to do so.
- Telephone Transaction Privileges for purchases, redemptions or
exchanges may be modified, suspended or terminated by the Fund at any
time. If an account has more than one owner, the Fund and the Transfer
Agent may rely on the instructions of any one owner. Telephone privileges
apply to each owner of the account and the dealer representative of record
for the account unless and until the Transfer Agent receives cancellation
instructions from an owner of the account.
- The Transfer Agent will record any telephone calls to verify data
concerning transactions and has adopted other procedures to confirm that
telephone instructions are genuine, by requiring callers to provide tax
identification numbers and other account data or by using PINs, and by
confirming such transactions in writing. If the Transfer Agent does not
use reasonable procedures it may be liable for losses due to unauthorized
transactions, but otherwise neither it nor the Fund will be liable for
losses or expenses arising out of telephone instructions reasonably
believed to be genuine. If you are unable to reach the Transfer Agent
during periods of unusual market activity, you may not be able to complete
a telephone transaction and should consider placing your order by mail.
- Redemption or transfer requests will not be honored until the
Transfer Agent receives all required documents in proper form. From time
to time, the Transfer Agent in its discretion may waive certain of the
requirements for redemptions stated in this Prospectus.
- Dealers that can perform account transactions for their clients by
participating in NETWORKING through the National Securities Clearing
Corporation are responsible for obtaining their clients' permission to
perform those transactions and are responsible to their clients who are
shareholders of the Fund if the dealer performs any transaction
erroneously or improperly.
- The redemption price for shares will vary from day to day because
the values of the securities in the Fund's portfolio fluctuate, and the
redemption price, which is the net asset value per share, will normally
be different for Class A, Class B and Class C shares. Therefore, the
redemption value of your shares may be more or less than their original
cost.
- Payment for redeemed shares is made ordinarily in cash and forwarded
by check or through AccountLink (as elected by the shareholder under the
redemption procedures described above) within 7 days after the Transfer
Agent receives redemption instructions in proper form, except under
unusual circumstances determined by the Securities and Exchange Commission
delaying or suspending such payments. For accounts registered in the name
of a broker/dealer, payment will be forwarded within 3 business days. The
Transfer Agent may delay forwarding a check or processing a payment via
AccountLink for recently purchased shares, but only until the purchase
payment has cleared. That delay may be as much as 10 days from the date
the shares were purchased. That delay may be avoided if you purchase
shares by certified check or arrange with your bank to provide telephone
or written assurance to the Transfer Agent that your purchase payment has
cleared.
- Involuntary redemptions of small accounts may be made by the Fund
if the account value has fallen below $200 for reasons other than the fact
that the market value of shares has dropped, and in some cases involuntary
redemptions may be made to repay the Distributor for losses from the
cancellation of share purchase orders.
- Under unusual circumstances, shares of the Fund may be redeemed "in
kind," which means that the redemption proceeds will be paid with
securities from the Fund's portfolio. Please refer to "How to Sell
Shares" in the Statement of Additional Information for more details.
- "Backup Withholding" of Federal income tax may be applied at the
rate of 31% from dividends, distributions and redemption proceeds
(including exchanges) if you fail to furnish the Fund a certified Social
Security or Employer Identification Number when you sign your application,
or if you violate Internal Revenue Service regulations on tax reporting
of income.
- The Fund does not charge a redemption fee, but if your dealer or
broker handles your redemption, they may charge a fee. That fee can be
avoided by redeeming your Fund shares directly through the Transfer Agent.
Under the circumstances described in "How to Buy Shares," you may be
subject to a contingent deferred sales charge when redeeming certain Class
A, Class B and Class C shares.
- To avoid sending duplicate copies of materials to households, the
Fund will mail only one copy of each annual and semi-annual report to
shareholders having the same last name and address on the Fund's records.
However, each shareholder may call the Transfer Agent at 1-800-525-7048
to ask that copies of those materials be sent personally to that
shareholder.
Dividends, Capital Gains and Taxes
Dividends. The Fund declares dividends separately for Class A, Class B and
Class C shares from net investment income and pays such dividends to
shareholders quarterly in March, June, September and December, but the
Board of Trustees can change that schedule. Dividends paid with respect
to Class A shares will generally be higher than for Class B and C shares
because expenses allocable to Class B and C shares will generally be
higher than for Class A shares. There is no fixed dividend rate and there
can be no assurance as to the payment of any dividends.
Capital Gains. The Fund may make distributions annually in December out
of any net short-term or long-term capital gains, and the Fund may make
supplemental distributions of capital gains following the end of its
fiscal year. Short-term capital gains are treated as dividends for tax
purposes. Long-term capital gains will be separately identified in the
tax information the Fund sends you after the end of the year. There can
be no assurance that the Fund will pay any capital gains distributions in
a particular year.
Distribution Options. When you open your account, specify on your
application how you want to receive your distributions. For
OppenheimerFunds retirement accounts, all distributions are reinvested.
For other accounts, you have four options:
- Reinvest All Distributions in the Fund. You can elect to reinvest
all dividends and long-term capital gains distributions in additional
shares of the Fund.
- Reinvest Long-Term Capital Gains Only. You can elect to reinvest
long-term capital gains in the Fund while receiving dividends by check or
sent to your bank account on AccountLink.
- Receive All Distributions in Cash. You can elect to receive a check
for all dividends and long-term capital gains distributions or have them
sent to your bank on AccountLink.
- Reinvest Your Distributions in Another OppenheimerFunds Account.
You can reinvest all distributions in another OppenheimerFunds account you
have established.
Taxes. If your account is not a tax-deferred retirement account, you
should be aware of the following tax implications of investing in the
Fund. Long-term capital gains are taxable as long-term capital gains when
distributed to shareholders. It does not matter how long you have held
your shares. Dividends paid from short-term capital gains and net
investment income are taxable as ordinary income. Distributions are
subject to federal income tax and may be subject to state or local taxes.
Your distributions are taxable when paid, whether you reinvest them in
additional shares or take them in cash. Every year the Fund will send you
and the IRS a statement showing the amount of each taxable distribution
you received in the previous year.
When more than 50% of its assets are invested in foreign securities at
the end of any fiscal year, the Fund may elect that Section 853 of the
Internal Revenue Code will apply to it to permit shareholders to take a
credit (or a deduction) on their own federal income tax returns for
foreign income taxes paid by the Fund. The Statement of Additional
Information contains further discussion of this tax provision.
- "Buying a Dividend": When a fund goes ex-dividend, its share price
is reduced by the amount of the distribution. If you buy shares on or
just before the ex-dividend date, or just before the Fund declares a
capital gains distribution, you will pay the full price for the shares and
then receive a portion of the price back as a taxable dividend or capital
gain.
- Taxes on Transactions: Share redemptions, including redemptions for
exchanges, are subject to capital gains tax. Generally speaking, a
capital gain or loss is the difference between the price you paid for the
shares and the price you received when you sold them.
- Returns of Capital: In certain cases distributions made by the Fund
may be considered a non-taxable return of capital to shareholders. If
that occurs, it will be identified in notices to shareholders. A non-
taxable return of capital may reduce your tax basis in your Fund shares.
This information is only a summary of certain federal tax information
about your investment. More information is contained in the Statement of
Additional Information, and in addition you should consult with your tax
adviser about the effect of an investment in the Fund on your particular
tax situation.
<PAGE>
APPENDIX TO PROSPECTUS OF
OPPENHEIMER GLOBAL GROWTH & INCOME FUND
Graphic material included in Prospectus of Oppenheimer Global Growth
& Income Fund: "Comparison of Total Return of Oppenheimer Global Growth
& Income Fund to the Morgan Stanley Capital International World Index and
the Lehman Aggregate Bond Index - Change in Value of $10,000 Hypothetical
Investments" in Class A and Class B shares.
Linear graphs will be included in the Prospectus of Oppenheimer Global
Growth & Income Fund (the "Fund") depicting the initial account value and
subsequent account value of a hypothetical $10,000 investment in each
class of shares of the Fund. In the case of the Fund's Class A shares,
that graph will cover the life of the Fund from 10/22/90 through 9/30/94
and in the case of the Fund's Class C shares will cover the period from
the inception of the class (December 1, 1993) through 9/30/94. The graphs
will compare such values with hypothetical $10,000 investments over the
same time periods to the Morgan Stanley Capital International World Index
and the Lehman Aggregate Bond Index. Set forth below are the relevant
data points that will appear on the linear graph. Additional information
with respect to the foregoing, including a description of the Morgan
Stanley Capital International World Index and the Lehman Aggregate Bond
Index, is set forth in the Prospectus Under "Performance of the Fund -
Comparing the Fund's Performance to the Market."
<TABLE>
<CAPTION>
Fiscal Year Oppenheimer Global
(Period) Growth & Income Morgan Stanley Lehman Aggregate
Ended Fund A World Index Bond Index
- ----------- ------------------ -------------- ----------------
<S> <C> <C> <C>
10/22/90 (1) $ 9,425 $10,000 $10,000
09/30/91 $10,454 $11,454 $11,454
09/30/92 $10,345 $11,338 $12,891
09/30/93 $12,518 $13,633 $14,178
09/30/94 $14,265 $14,664 $13,721
Fiscal Year Oppenheimer Global
(Period) Growth & Income Morgan Stanley Lehman Aggregate
Ended Fund B World Index Bond Index
- ----------- ------------------ -------------- ----------------
<S> <C> <C> <C>
12/01/93(2) $10,000 $10,000 $10,000
09/30/94 $10,641 $11,100 $9,724
<FN>
- ----------------------
(1) The Fund commenced operations on October 22, 1990.
(2) Class C shares of the Fund were first publicly offered on December
1, 1993.
</TABLE>
<PAGE>
Oppenheimer Global Growth & Income Fund
Two World Trade Center
New York, New York 10048-0023
1-800-525-7048
Investment Adviser
Oppenheimer Management Corporation
Two World Trade Center
New York, New York 10048-0203
Distributor
Oppenheimer Funds Distributor, Inc.
Two World Trade Center
New York, New York 10048-0203
Transfer and Shareholder Servicing Agent
Oppenheimer Shareholder Services
P.O. Box 5270
Denver, Colorado 80217
1-800-525-7048
Custodian of Portfolio Securities
The Bank of New York
One Wall Street
New York, New York 10015
Independent Auditors
KPMG Peat Marwick LLP
707 Seventeenth Street
Denver, Colorado 80202
Legal Counsel
Gordon Altman Butowsky Weitzen
Shalov & Wein
114 West 47th Street
New York, New York 10036
No dealer, salesperson or any other person has been authorized to give any
information or to make any representations other than those contained in
this Prospectus or the Statement of Additional Information, and if given
or made, such information and representations must not be relied upon as
having been authorized by the Fund, Oppenheimer Management Corporation,
Oppenheimer Funds Distributor, Inc. or any affiliate thereof. This
Prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any of the securities offered hereby in any state to any
person to whom it is unlawful to make such an offer in such state.
PR215.1095 Printed on recycled paper
<PAGE>
Oppenheimer Global Growth & Income Fund
Two World Trade Center, New York, New York 10048-0203
1-800-525-7048
Statement of Additional Information dated October 10, 1995
This Statement of Additional Information is not a Prospectus. This
document contains additional information about the Fund and supplements
information in the Prospectus dated October 10, 1995. It should be read
together with the Prospectus, which may be obtained by writing to the
Fund's Transfer Agent, Oppenheimer Shareholder Services, at P.O. Box 5270,
Denver, Colorado 80217 or by calling the Transfer Agent at the toll-free
number shown above.
CONTENTS
Page
About the Fund
Investment Objective and Policies
Investment Policies and Strategies
Other Investment Techniques and Strategies
Other Investment Restrictions
How the Fund is Managed
Organization and History
Trustees and Officers of the Fund
The Manager and Its Affiliates
Brokerage Policies of the Fund
Performance of the Fund
Distribution and Service Plans
About Your Account
How To Buy Shares
How To Sell Shares
How To Exchange Shares
Dividends, Capital Gains and Taxes
Additional Information About the Fund
Financial Information About the Fund
Independent Auditors' Report
Financial Statements
Appendix A: Ratings of Investments A-1
Appendix B: Industry Classifications B-1
<PAGE>
ABOUT THE FUND
Investment Objective and Policies
Investment Policies and Strategies. The investment objective and policies
of the Fund are described in the Prospectus. Set forth below is
supplemental information about those policies and the types of securities
in which the Fund invests, as well as strategies the Fund may use to try
to achieve its objective. Capitalized terms used in this Statement of
Additional Information have the same meaning as those terms have in the
Prospectus.
In selecting securities for the Fund's portfolio, the Fund's investment
adviser, Oppenheimer Management Corporation (the "Manager"), evaluates the
merits of particular equity and fixed-income securities primarily through
the exercise of its own investment analysis. This may include, among other
things, evaluation of the history of the issuer's operations, prospects
for the industry of which the issuer is part, the issuer's financial
condition, the issuer's pending product developments and developments by
competitors, the effect of general market and economic conditions on the
issuer's business, and legislative proposals or new laws that might affect
the issuer. Depending on the assessment of market conditions by the
Manager, the Fund may emphasize investments in common stocks, and
securities convertible into common stocks, or securities acquired
primarily to produce income, or in a combination of both types of
investments. While the Fund may invest in securities having appreciation
possibilities, such securities will not be selected which, in the view of
the Manager, would involve undue risk.
- Securities of Growth-Type Companies. The Fund may emphasize
securities of "growth-type" companies. Such issuers typically are those
whose goods or services have relatively favorable long-term prospects for
increasing demand, or ones that develop new products, services or markets
and normally retain a relatively large part of their earnings for
research, development and investment in capital assets. They may include
companies in the natural resources fields or those developing industrial
applications for new scientific knowledge having potential for
technological innovation, such as nuclear energy, oceanography, business
services and new customer products.
- Investing in Small, Unseasoned Companies. The securities of small,
unseasoned companies may have a limited trading market, which may
adversely affect the Fund's ability to dispose of them and can reduce the
price the Fund might be able to obtain for them. If other investment
companies and investors trade the same securities when the Fund attempts
to dispose of its holdings, the Fund may receive lower prices than might
otherwise be obtained, because of the thinner market for such securities.
- Fixed-Income Securities. All fixed-income securities are subject
to two types of risks: credit risk and interest rate risk. Credit risk
relates to the ability of the issuer to meet interest or principal
payments or both as they become due. Generally, higher yielding bonds are
subject to credit risk to a greater extent that lower yielding, higher
quality bonds. Interest rate risk refers to the fluctuations in value of
fixed-income securities resulting solely from the inverse relationship
between price and yield of fixed-income securities. An increase in
interest rates will tend to reduce the market value of fixed-income
investments, and a decline in interest rates will tend to increase their
value. In addition, debt securities with longer maturities, which tend
to produce higher yields, are subject to potentially greater capital
appreciation and depreciation than obligations with shorter maturities.
Fluctuations in the market value of fixed-income securities after the Fund
buys them will not affect the interest payable on those securities, nor
the cash income from such securities. However, those price fluctuations
will be reflected in the valuations of these securities and therefore the
Fund's net asset values.
As stated in the Prospectus, the Fund may not invest more than 25% of
its assets in bonds and debentures in the lower rating categories of
Moody's and Standard & Poor's, the principal rating services. High yield
securities, whether rated or unrated, may be subject to greater market
fluctuations and risks of loss of income and principal than lower-
yielding, higher-rated, fixed-income securities. Risks of high yield
securities may include (i) limited liquidity and secondary market support,
(ii) substantial market price volatility resulting from changes in
prevailing interest rates, (iii) subordination of the obligations to the
prior claims of banks and other senior lenders, (iv) the operation of
mandatory sinking fund or call/redemption provisions during periods of
declining interest rates that could cause the Fund to be able to reinvest
premature redemption proceeds only in lower-yielding portfolio securities,
(v) the possibility that earnings of the issuer may be insufficient to
meet its debt service, and (vi) the issuer's low creditworthiness and
potential for insolvency during periods of rising interest rates and
economic downturn. As a result of the limited liquidity of high yield
securities, at times their prices have experienced significant and rapid
declines when a substantial number of holders decided to sell
simultaneously. A decline is also likely in the high yield bond market
during a general economic downturn. An economic downturn or an increase
in interest rates could severely disrupt the market for high yield bonds
and adversely affect the value of outstanding bonds and the ability of the
issuers to repay principal and interest. In addition, there have been
several Congressional attempts to limit the use of tax and other
advantages of high yield bonds which, if enacted, could adversely affect
the value of these securities and the Fund's net asset value. For
example, federally-insured savings and loan associations have been
required to divest their investments in high yield bonds.
- Convertible Securities. While convertible securities are a form
of debt security in many cases, their conversion feature (allowing
conversion into equity securities) causes them to be regarded more as
"equity equivalents." As a result, the rating assigned to the security
has less impact on the Manager's investment decision with respect to
convertible securities than in the case of non-convertible fixed-income
securities. To determine whether convertible securities should be
regarded as "equity equivalents," the Manager examines the following
factors: (1) whether, at the option of the investor, the convertible
security can be exchanged for a fixed number of shares of common stock of
the issuer, (2) whether the issuer of the convertible securities has
restated its earnings per share of common stock on a fully diluted basis
(considering the effect of converting the convertible securities), and (3)
the extent to which the convertible security may be a defensive "equity
substitute," providing the ability to participate in any appreciation in
the price of the issuer's common stock.
- Foreign Securities. "Foreign securities" are equity and debt
securities issued by companies organized under the laws of countries other
than the U.S. and debt securities issued by foreign governments, which
securities are traded on foreign securities exchanges or in foreign over-
the-counter markets. Securities of foreign issuers: (i) represented by
American Depositary Receipts, (ii) traded in the U.S. over-the-counter
markets or (iii) listed on a U.S. securities exchange are not considered
"foreign securities" because they are not subject to many of the special
considerations and risks (discussed below) that apply to investments in
foreign securities traded and held abroad.
A number of current significant political and economic developments may
affect investments in foreign securities and in securities of companies
with operations overseas. Such developments include dramatic political
changes in government and economic policies in several Eastern European
countries, Germany and the Commonwealth of Independent States (the former
Soviet Union), as well as unification of the European Economic Community.
The course of any of one or more of these events and the effect on trade
barriers, competition and markets for consumer goods and services is
uncertain.
Because the Fund may purchase securities denominated in foreign
currencies, a change in the value of any such currency against the U.S.
dollar will result in a change in the U.S. dollar value of the Fund's
assets and the Fund's income available for distribution. In buying
foreign securities, the Fund may convert U.S. dollars into foreign
currency, but only to effect securities transactions on foreign securities
exchanges and not to hold such currency as an investment. In addition,
although a portion of the Fund's investment income, if any, may be
received or realized in foreign currencies, the Fund will be required to
compute and distribute its income in U.S. dollars, and absorb the cost of
currency fluctuations. The Fund may engage in foreign currency exchange
transactions for hedging purposes to protect against changes in future
exchange rates. See "Other Investment Techniques and Strategies-Hedging"
below.
The values of foreign investments and the investment income derived
from them may also be affected unfavorably by changes in currency exchange
control regulations. Although the Fund will invest only in securities
denominated in foreign currencies that at the time of investment do not
have significant government-imposed restrictions on conversion into U.S.
dollars, there can be no assurance against subsequent imposition of
currency controls. In addition, the values of foreign securities will
fluctuate in response to changes in U.S. and foreign interest rates.
Investing in foreign securities offers potential benefits not
available from investing solely in securities of domestic issuers by
offering the opportunity to invest in foreign issuers that appear to offer
growth potential, or in foreign countries with economic policies or
business cycles different from those of the U.S., or to reduce
fluctuations in portfolio value by taking advantage of in foreign stock
markets that do not move in a manner parallel to U.S. markets. From time
to time, U.S. Government policies have discouraged certain investments
abroad by U.S. investors, through taxation or other restrictions, and it
is possible that such restrictions could be reimposed.
The Fund intends to invest less than 5% of its total assets in
securities of issuers of Eastern European countries. The social,
political and economic reforms in most Eastern European countries are
still in their early stages, and there can be no assurance that these
reforms will continue, or, if they continue, will prove beneficial to the
Fund. Eastern European countries in many cases have no existing capital
market structure for the sale and trading of securities. Participation
in the growth of such countries may be available initially or solely
through investment in joint ventures, state enterprises, private
placements, unlisted securities or other similar illiquid investment
vehicles.
In addition, even though opportunities for investment may exist in
Eastern European countries, any change in the leadership or policies of
the governments of those countries, or changes in the leadership or
policies of any other government that exercises a significant influence
over those countries, may halt the expansion of or reverse the
liberalization of foreign investment policies now occurring and thereby
eliminate any investment opportunities which may currently exist.
Prospective investors should note that upon the accession to power
of authoritarian regimes, the governments of a number of the Eastern
European countries previously expropriated large quantities of real and
personal property, similar to the property which will be represented by
the securities purchased by the Fund. The claims of property owners
against those governments were never finally settled. There can be no
assurance that any property represented by securities purchased by the
Fund will not also be expropriated, nationalized, or otherwise
confiscated. If such confiscation were to occur, the Fund could lose a
substantial portion of its investments in such countries. The Fund's
investments would similarly be adversely affected by exchange control
regulations in any of those countries.
The obligations of foreign governmental entities may or may not be
supported by the full faith and credit of a foreign government.
Obligations of supranational entities include those of international
organizations designated or supported by governmental entities to promote
economic reconstruction or development and of international banking
institutions and related government agencies. Examples include the
International Bank for Reconstruction and Development (the World Bank),
the European Coal and Steel Community, the Asian Development Bank and the
Inter-American Development Bank. The governmental members, or
"stockholders," usually make initial capital contributions to the
supranational entity and in many cases are committed to make additional
capital contributions if the supranational entity is unable to repay its
borrowings. Each supranational entity's lending activities are limited
to a percentage of its total capital (including "callable capital"
contributed by members at the entity's call), reserves and net income.
There is no assurance that foreign governments will be able or willing to
honor their commitments.
The Fund may invest in U.S. dollar-denominated, collateralized "Brady
Bonds", as described in the Prospectus. These foreign debt obligations
may be fixed-rate par bonds or floating-rate discount bonds and are
generally collateralized in full as to principal due at maturity by U.S.
Treasury zero coupon obligations that have the same maturity as the Brady
Bonds. Brady Bonds are often viewed as having three or four valuation
components: (i) the collateralized repayment of principal at final
maturity; (ii) the collateralized interest payments; (iii) the
uncollateralized interest payments; and (iv) any uncollateralized
repayment of principal at maturity (these uncollateralized amounts
constitute the "residual risk"). In the event of a default with respect
to collateralized Brady Bonds as a result of which the payment obligations
of the issuer are accelerated, the zero coupon U.S. Treasury securities
held as collateral for the payment of principal will not be distributed
to investors, nor will such obligations be sold and the proceeds
distributed. The collateral will be held by the collateral agent to the
scheduled maturity of the defaulted Brady Bonds, which will continue to
be outstanding, at which time the face amount of the collateral will equal
the principal payments which would have then been due on the Brady Bonds
in the normal course. In addition, in light of the residual risk of Brady
Bonds and, among other factors, the history of defaults with respect to
commercial bank loans by public and private entities of countries issuing
Brady Bonds, investment in Brady Bonds are to be viewed as speculative.
- Asset-Backed Securities. These securities, issued by trusts and
special purpose corporations, are backed by pools of assets, primarily
automobile and credit-card receivables and home equity loans, which pass
through the payments on the underlying obligations to the security holders
(less servicing fees paid to the originator or fees for any credit
enhancement). The value of an asset-backed security is affected by
changes in the market's perception of the asset backing the security, the
creditworthiness of the servicing agent for the loan pool, the originator
of the loans, or the financial institution providing any credit
enhancement, and is also affected if any credit enhancement has been
exhausted. Payments of principal and interest passed through to holders
of asset-backed securities are typically supported by some form of credit
enhancement, such as a letter of credit, surety bond, limited guarantee
by another entity or having a priority to certain of the borrower's other
securities. The degree of credit enhancement varies, and generally
applies to only a fraction of the asset-backed security's par value until
exhausted. If the credit enhancement of an asset-backed security held by
the Fund has been exhausted, and if any required payments of principal and
interest are not made with respect to the underlying loans, the Fund may
experience losses or delays in receiving payment. The risks of investing
in asset-backed securities are ultimately dependent upon payment of the
consumer loans by the individual borrowers. As a purchaser of an asset-
backed security, the Fund would generally have no recourse to the entity
that originated the loans in the event of default by a borrower. The
underlying loans are subject to prepayments that shorten the weighted
average life of asset-backed securities and may lower their return in the
same manner as described in the Prospectus and in "Mortgage-Backed
Securities" below for prepayments of a pool of mortgage loans underlying
mortgage-backed securities.
- U.S. Government Securities. U.S. Government Securities are debt
obligations issued or guaranteed by the U.S. Government or one of its
agencies or instrumentalities, and include "zero coupon" Treasury
securities, mortgage-backed securities, collateralized mortgage-backed
obligations and money market instruments. See "Temporary Investments" for
further discussion.
- Mortgage-Backed Securities. These securities represent
participation interests in pools of residential mortgage loans that may
or may not be guaranteed by agencies or instrumentalities of the U.S.
Government. Such securities differ from conventional debt securities
which generally provide for periodic payment of interest in fixed or
determinable amounts (usually semi-annually) with principal payments at
maturity or specified call dates. Some of the mortgage-backed securities
in which the Fund may invest may be backed by the full faith and credit
of the U.S. Treasury (e.g., direct pass-through certificates of the
Government National Mortgage Association (the "GNMA")); some are supported
by the right of the issuer to borrow from the U.S. Government (e.g.,
obligations of Federal Home Loan Banks); and some are backed by only the
credit of the issuer itself. Any such guarantees do not extend to the
value of or yield of the mortgage-backed securities themselves or to the
net asset value of the Fund's shares. Any of these government agencies
may issue collateralized mortgage-backed obligations ("CMO's"), discussed
below.
The yield on mortgage-backed securities is based on the average
expected life of the underlying pool of mortgage loans. The actual life
of any particular pool will be shortened by any unscheduled or early
payments of principal and interest. Principal prepayments generally
result from the sale of the underlying property or the refinancing or
foreclosure of underlying mortgages. The occurrence of prepayments is
affected by a wide range of economic, demographic and social factors and,
accordingly, it is not possible to predict accurately the average life of
a particular pool. Yield on such pools is usually computed by using the
historical record of prepayments for that pool or, in the case of newly-
issued mortgages, the prepayment history of similar pools. The actual
prepayment experience of a pool of mortgage loans may cause the yield
realized by the Fund to differ from the yield calculated on the basis of
the expected average life of the pool.
Prepayments tend to increase during periods of falling interest
rates, while during periods of rising interest rates prepayments will most
likely decline. When prevailing interest rates rise, the value of a pass-
through security may decrease as do other debt securities, but, when
prevailing interest rates decline, the value of a pass-through security
is not likely to rise on a comparable basis with other debt securities
because of the prepayment feature of pass-through securities. The Fund's
reinvestment of scheduled principal payments and unscheduled prepayments
it receives may occur at higher or lower rates than the original
investment, thus affecting the yield of the Fund. Monthly interest
payments received by the Fund have a compounding effect that may increase
the yield to the Fund more than debt obligations that pay interest semi-
annually. Due to those factors, mortgage-backed securities may be less
effective than Treasury bonds of similar maturity at maintaining yields
during periods of declining interest rates. Accelerated prepayments
adversely affect yields for pass-through securities purchased at a premium
(i.e., at a price in excess of principal amount) and may involve
additional risk of loss of principal because the premium may not have been
fully amortized at the time the obligation is repaid. The opposite is
true for pass-through securities purchased at a discount. The Fund may
purchase mortgage-backed securities at par, at a premium or at a discount.
- GNMA Certificates. Certificates of the Government National
Mortgage Association ("GNMA Certificates") are mortgage-backed securities
that evidence an undivided interest in a pool or pools of mortgages. The
GNMA Certificates that the Fund may purchase are of the "modified pass-
through" type, which entitle the holder to receive timely payment of all
interest and principal payments due on the mortgage pool, net of fees paid
to the "issuer" and the GNMA, regardless of whether the mortgagor actually
makes the payments.
The National Housing Act authorized the GNMA to guarantee the timely
payment of principal and interest on securities backed by a pool of
mortgages insured by the Federal Housing Administration (the "FHA") or
guaranteed by the Veterans Administration (the "VA"). The GNMA guarantee
is backed by the full faith and credit of the U.S. Government. The GNMA
is also empowered to borrow without limitation from the U.S. Treasury if
necessary to make any payments under its guarantee.
The average life of a GNMA Certificate is likely to be substantially
shorter than the original maturity of the mortgages underlying the
securities. Prepayments of principal by mortgagors and mortgage
foreclosures will usually result in the return of the greater part of
principal investment long before the maturity of the mortgages in the
pool. Foreclosures impose no risk to principal investment because of the
GNMA guarantee, except to the extent that the Fund has purchased the
certificates at a premium in the secondary market.
- FNMA Securities. The Federal National Mortgage Association (the
"FNMA") was established to create a secondary market in mortgages insured
by the FHA. FNMA issues guaranteed mortgage pass-through certificates
("FNMA Certificates"). The FNMA Certificates resemble GNMA Certificates
in that each FNMA Certificate represents a pro rata share of all interest
and principal payments made and owed on the underlying pool. The FNMA
guarantees timely payment of interest and principal on FNMA Certificates.
The FNMA guarantee is not backed by the full faith and credit of the U.S.
Government.
- FHLMC Securities. The Federal Home Loan Mortgage Corporation (the
"FHLMC") was created to promote development of a nationwide secondary
market for conventional residential mortgages. The FHLMC issues mortgage
pass-through certificates ("PCS"). PCS resemble GNMA Certificates in that
each PC represents a pro rata share of all interest and principal payments
made and owed on the underlying pool. The FHLMC guarantees timely monthly
payment of interest on PCS and the ultimate payment of principal. The
FHLMC guarantee is not backed by the full faith and credit of the U.S.
Government.
- Collateralized Mortgage-Backed Obligations ("CMOs"). CMOs are
fully-collateralized bonds that are the general obligations of the issuer
thereof, either the U.S. Government, a U.S. Government instrumentality,
or a private issuer. Such bonds generally are secured by an assignment
to a trustee (under the indenture pursuant to which the bonds are issued)
of collateral consisting of a pool of mortgages. Payments with respect
to the underlying mortgages generally are made to the trustee under the
indenture. Payments of principal and interest on the underlying mortgages
are not passed through to the holders of the CMOs as such (i.e., the
character of payments of principal and interest is not passed through, and
therefore payments to holders of CMOs attributable to interest paid and
principal repaid on the underlying mortgages do not necessarily constitute
income and return of capital, respectively, to such holders), but such
payments are dedicated to payment of interest on and repayment of
principal of the CMOs. CMOs often are issued in two or more classes with
different characteristics such as varying maturities and stated rates of
interest. Because interest and principal payments on the underlying
mortgages are not passed through to holders of CMOs, CMOs of varying
maturities may be secured by the same pool of mortgages, the payments on
which are used to pay interest on each class and to retire successive
maturities in sequence. Unlike other mortgage-backed securities
(discussed above), CMOs are designed to be retired as the underlying
mortgages are repaid. In the event of prepayment on such mortgages, the
class of CMO first to mature generally will be paid down. Therefore,
although in most cases the issuer of CMOs will not supply additional
collateral in the event of such prepayment, there will be sufficient
collateral to secure CMOs that remain outstanding.
- Mortgage-Backed Security Rolls. The Fund may enter into "forward
roll" transactions with respect to mortgage-backed securities issued by
the GNMA, FNMA or FHLMC. In a forward roll transaction, which is
considered to be a borrowing by the Fund, the Fund will sell a mortgage-
backed security to a bank or other permitted entity and simultaneously
agree to repurchase a similar security from the institution at a later
date at an agreed upon price. The mortgage-backed securities that are
repurchased will bear the same interest rate as those sold, but generally
will be collateralized by different pools of mortgages with different
prepayment histories than those sold. Risks of mortgage-backed security
rolls include (i) the risk of prepayment prior to maturity, (ii) the
possibility that the Fund may not be entitled to receive interest and
principal payments on the securities sold and that the proceeds of the
sale may have to be invested in money market instruments (typically
repurchase agreements) maturing not later than the expiration of the roll,
and (iii) the risk that the market value of the securities sold by the
Fund may decline below the price at which the Fund is obligated to
purchase the securities. Upon entering into a mortgage-backed security
roll, the Fund will be required to place cash, U.S. Government securities
or other high-grade debt securities in a segregated account with its
Custodian in an amount equal to its obligation under the roll.
- Temporary Defensive Investments. As stated in the Prospectus, the
Fund may hold a portion of its assets in cash equivalents (commercial
paper, Treasury bills and U.S. Government securities maturing in one year
or less) for day to day operating purposes. Under unusual market or
economic conditions (including drastic market fluctuations), the Fund may
invest up to 100% of its assets in those instruments identified in the
Prospectus under "Temporary Defensive Investments."
- U.S. Government Securities. U.S. Government securities are debt
obligations issued or guaranteed by the U.S. Government or one of its
agencies or instrumentalities. Certain of these obligations, including
U.S. Treasury notes and bonds, and GNMA debentures ("Ginnie Mae's"), are
supported by the full faith and credit of the U.S. Certain other U.S.
Government securities, issued or guaranteed by Federal agencies or
government sponsored enterprises, are not supported by the full faith and
credit of the U.S. These latter securities may include obligations
supported by the right of the issuer to borrow from the U.S. Treasury,
such as obligations of the Federal Home Loan Mortgage Corporation
("Freddie Macs's") and obligations supported by the credit of the
instrumentality, such as FNMA bonds (Fannie Mae's"). U.S. Government
securities in which the Fund may invest include zero coupon U.S. Treasury
securities, mortgage-backed securities and CMOs (see discussion above) and
money market instruments.
- Zero Coupon Securities. The Fund may invest in zero coupon
securities issued by the U.S. Treasury. Zero coupon U.S. Treasury
securities are U.S. Treasury notes and bonds that have been stripped of
their unmatured interest coupons and receipts or bills issued without
interest coupons, U.S. Treasury certificates representing interest in such
stripped debt obligations or coupons. The Fund may also invest in zero
coupon securities issued by other issuers, including foreign governments.
These securities usually trade at a deep discount from their face or
par value and will be subject to greater fluctuations in market value in
response to changing interest rates than debt obligations of comparable
maturities that make current payments of interest. However, the interest
rate is "locked in" and there is no risk of having to reinvest periodic
interest payments in securities having lower rates. Because the Fund
accrues taxable income from zero coupon securities issued by either the
U.S. Treasury or other issuers without receiving cash, the Fund may be
required to sell portfolio securities in order to pay a dividend
depending, among other things, upon the proportion of shareholders who
elect to receive dividends in cash rather than reinvesting dividends in
additional shares of the Fund. The Fund might also sell portfolio
securities to maintain portfolio liquidity. In either case, cash
distributed or held by the Fund and not reinvested in Fund shares will
hinder the Fund in seeking a high level of current income.
- Commercial Paper. The Fund's commercial paper investments include:
Variable Amount Master Demand Notes. Master demand notes are
corporate obligations that permit the investment of fluctuating amounts
by the Fund at varying rates of interest pursuant to direct arrangements
between the Fund, as lender, and the borrower. These notes may or may not
be backed by bank letters of credit. Because these notes are direct
lending arrangements between the lender and borrower, it is not generally
contemplated that they will be traded. There is no secondary market for
these notes, although they are redeemable (and thus immediately repayable
by the borrower) at principal amount, plus accrued interest, at any time.
Accordingly, the Fund's right to redeem is dependent upon the ability of
the borrower to pay principal and interest on demand. The Manager will
consider the earning power, cash flow and other liquidity ratios of the
issuer, and its ability to pay principal and interest on demand, including
a situation in which all holders of such notes made demand simultaneously.
Investments in bank time deposits and master demand notes are subject to
the 10% of total assets limitation on securities that are not readily
marketable.
Floating Rate/Variable Rate Notes. Some of the notes the Fund may
purchase may have variable or floating interest rates. Variable rates are
adjustable at stated periodic intervals. Floating rates are automatically
adjusted according to a specified market rate for such investments, such
as the percentage of the prime rate of a bank, or the 91-day U.S. Treasury
Bill rate. Such obligations may be secured by bank letters of credit or
other credit support arrangements.
- Warrants and Rights. Warrants basically are options to purchase
equity securities at set prices valid for a specified period of time. The
prices of warrants do not necessarily move in a manner parallel to the
prices of the underlying securities. The price the Fund pays for a
warrant will be lost unless the warrant is exercised prior to its
expiration. Rights are similar to warrants, but normally have a short
duration and are distributed directly by the issuer to its shareholders.
Warrants and rights have no voting rights, receive no dividends and have
no rights with respect to the assets of the issuer.
Other Investment Techniques and Strategies
- Borrowing for Leverage. From time to time, the Fund may increase
its ownership of securities by borrowing from banks on an unsecured basis
and investing the borrowed funds subject to the restrictions stated in the
Prospectus. Any such borrowing will be made only from banks, and,
pursuant to the requirements of the Investment Company Act of 1940 (the
"Investment Company Act"), will only be made to the extent that the value
of the Fund's assets, less its liabilities other than borrowings, is equal
to at least 300% of all borrowings including the proposed borrowing. If
the value of the Fund's assets, when computed in that manner, should fail
to meet the 300% asset coverage requirement, the Fund is required within
three days to reduce its bank debt to the extent necessary to meet such
requirement. To do so, the Fund may have to sell a portion of its
investments at a time when independent investment judgment would not
dictate such sale. Interest on money borrowed is an expense the Fund would
not otherwise incur, so that during period of substantial borrowing, its
expenses may increase more than funds that do not borrow.
- Loans of Portfolio Securities. The Fund may lend its portfolio
securities subject to the restrictions stated in the Prospectus. Under
applicable regulatory requirements (which are subject to change), the loan
collateral on each business day must at least equal the value of the
loaned securities and must consist of cash, bank letters of credit or
securities of the U.S. Government (or its agencies or instrumentalities).
To be acceptable as collateral, letters of credit must obligate a bank to
pay amounts demanded by the Fund if the demand meets the terms of the
letter. Such terms and the issuing bank must be satisfactory to the Fund.
When it lends securities, the Fund receives amounts equal to the dividends
or interest on loaned securities and also receives one or more of (a)
negotiated loan fees, (b) interest on securities used as collateral, and
(c) interest on short-term debt securities purchased with such loan
collateral. Either type of interest may be shared with the borrower. The
Fund may also pay reasonable finder's, custodian and administrative fees.
The terms of the Fund's loans must meet applicable tests under the
Internal Revenue Code and must permit the Fund to reacquire loaned
securities on five days' notice or in time to vote on any important
matter.
- Repurchase Agreements. The Fund may acquire securities subject to
repurchase agreements for liquidity purposes to meet anticipated
redemptions, or pending the investment of the proceeds from sales of Fund
shares, or pending the settlement of purchases of portfolio securities.
In a repurchase transaction, the Fund acquires a security from, and
simultaneously resells it to, an approved vendor. An "approved vendor"
is a U.S. commercial bank or the U.S. branch of a foreign bank or a
broker-dealer that has been designated a primary dealer in government
securities, that must meet credit requirements set by the Fund's Board of
Trustees from time to time. The resale price exceeds the purchase price
by an amount that reflects an agreed-upon interest rate effective for the
period during which the repurchase agreement is in effect. The majority
of these transactions run from day to day, and delivery pursuant to the
resale typically will occur within one to five days of the purchase.
Repurchase agreements are considered "loans" under the Investment Company
Act, collateralized by the underlying security. The Fund's repurchase
agreements require that at all times while the repurchase agreement is in
effect, the value of the collateral must equal or exceed the repurchase
price to fully collateralize the repayment obligation. Additionally, the
Manager will impose creditworthiness requirements to confirm that the
vendor is financially sound and will continuously monitor the collateral's
value.
- Restricted and Illiquid Securities. As stated in the Prospectus,
restricted securities, unregistered under the Securities Act of 1933,
which are offered and sold to institutional investors under Rule 144A, may
be readily marketable and thus not illiquid if the Fund's Board of
Trustees, or the Manager under Board-approved guidelines, so determines.
Such guidelines take into account, among other factors, trading activity
for such securities and the availability of reliable pricing information.
If there is a lack of trading interest in particular Rule 144A securities,
the Fund's holdings of those securities may be illiquid. There may be
undesirable delays in selling such securities at a price representing
their fair value. The expenses of registration of restricted securities
that are illiquid may be negotiated by the Fund at the time such
securities are purchased by the Fund. When registration is required
before such securities may be sold, a considerable period may elapse
between a decision to sell the securities and the time when the Fund would
be permitted to sell them. Thus, the Fund would bear the risks of any
downward price fluctuation during that period. The Fund also may acquire,
through private placements, securities having contractual restrictions on
their resale, which might lower the amount realizable upon the sale of
such securities. The Fund will also treat as illiquid any OTC option held
by it, as well as repurchase transactions having a maturity beyond seven
days.
- Participation Interests. The Fund may invest in participation
interests, subject to the limitation, described in "Illiquid and
Restricted Securities" in the Prospectus on investments by the Fund in
illiquid investments. Participation interests provide the Fund an
undivided interest in a loan made by the issuing financial institution in
the proportion that the Fund's participation interest bears to the total
principal amount of the loan. No more than 5% of the Fund's net assets
can be invested in participation interests of the same borrower. The
issuing financial institution may have no obligation to the Fund other
than to pay the Fund the proportionate amount of the principal and
interest payments it receives. Participation interests are primarily
dependent upon the creditworthiness of the borrowing corporation, which
is obligated to make payments of principal and interest on the loan, and
there is a risk that such borrowers may have difficulty making payments.
In the event the borrower fails to pay scheduled interest or principal
payments, the Fund could experience a reduction in its income and might
experience a decline in the value of that participation interest and in
the net asset value of its shares. In the event of a failure by the
financial institution to perform its obligation in connection with the
participation agreement, the Fund might incur certain costs and delays in
realizing payment or may suffer a loss of principal and/or interest.
- "When-Issued" and Delayed Delivery Transactions. The Fund may
purchase securities on a "when-issued" basis, and may purchase or sell
such securities on a "delayed delivery" basis. Although the Fund will
enter into such transactions for the purpose of acquiring securities for
its portfolio or for delivery pursuant to options contracts it has entered
into, the Fund may dispose of a commitment prior to settlement. "When-
issued" or "delayed delivery" refers to securities whose terms and
indenture are available and for which a market exists, but which are not
available for immediate delivery. When such transactions are negotiated,
the price (which is generally expressed in yield terms) is fixed at the
time the commitment is made, but delivery and payment for the securities
take place at a later date. The Fund does not intend to make such
purchases for speculative purposes. The commitment to purchase a security
for which payment will be made on a future date may be deemed a separate
security and involve a risk of loss if the value of the security declines
prior to the settlement date. During the period between commitment by the
Fund and settlement (generally within two months but not to exceed 120
days), no payment is made for the securities purchased by the purchaser,
and no interest accrues to the purchaser from the transaction. Such
securities are subject to market fluctuation; the value at delivery may
be less than the purchase price. The Fund will maintain a segregated
account with its Custodian, consisting of cash, U.S. Government securities
or other high grade debt obligations at least equal to the value of
purchase commitments until payment is made.
The Fund will engage in when-issued transactions in order to secure
what is considered to be an advantageous price and yield at the time of
entering into the obligation. When the Fund engages in when-issued or
delayed delivery transactions, it relies on the buyer or seller, as the
case may be, to consummate the transaction. Failure of the buyer or
seller to do so may result in the Fund losing the opportunity to obtain
a price and yield considered to be advantageous. At the time the Fund
makes a commitment to purchase or sell a security on a when-issued or
forward commitment basis, it records the transaction and reflects the
value of the security purchased, or if a sale, the proceeds to be
received, in determining its net asset value. If the Fund chooses to (i)
dispose of the right to acquire a when-issued security prior to its
acquisition or (ii) dispose of its right to deliver or receive against a
forward commitment, it may incur a gain or loss.
To the extent the Fund engages in when-issued and delayed delivery
transactions, it will do so for the purpose of acquiring or selling
securities consistent with its investment objective and policies and not
for the purposes of investment leverage. The Fund enters into such
transactions only with the intention of actually receiving or delivering
the securities, although (as noted above), when-issued securities and
forward commitments may be sold prior to settlement date. In addition,
changes in interest rates before settlement in a direction other than that
expected by the Manager will affect the value of such securities and may
cause a loss to the Fund.
When-issued transactions and forward commitments allow the Fund a
technique to use against anticipated changes in interest rates and prices.
For instance, in periods of rising interest rates and falling prices, the
Fund might sell securities in its portfolio on a forward commitment basis
to attempt to limit its exposure to anticipated falling prices. In
periods of falling interest rates and rising prices, the Fund might sell
portfolio securities and purchase the same or similar securities on a
when-issued or forward commitment basis, thereby obtaining the benefit of
currently higher cash yields
- Short Sales Against-the-Box. In this type of short sale, while the
short position is open, the Fund must own an equal amount of such
securities sold short, or by virtue of ownership of securities have the
right, without payment of further consideration, to obtain an equal amount
of the securities sold short. Short sales against-the-box may be made to
defer, for Federal income tax purposes, recognition of gain or loss on the
sale of securities "in the box" until the short position is closed out.
They may also be used to protect a gain on the security "in the box" when
the Fund does not want to sell it and recognize a capital gain.
- Hedging. As described in the Prospectus, the Fund may write
covered calls or employ one or more types of Hedging Instruments,
including the futures identified in the Prospectus ("Futures"). The
Fund's strategy of hedging with Futures and options on Futures will be
incidental to the Fund's activities in the underlying cash market. When
hedging to attempt to protect against declines in the market value of the
Fund's portfolio, to permit the Fund to retain unrealized gains in the
value of portfolio securities which have appreciated, or to facilitate
selling securities for investment reasons, the Fund may (i) sell Futures,
(ii) buy puts on such Futures or securities, or (iii) write covered calls
on securities or on Futures. When hedging to permit the Fund to establish
a position in the equities market as a temporary substitute for purchasing
individual equity securities (which the Fund will normally purchase, and
then terminate that hedging position), or to attempt to protect against
the possibility that portfolio debt securities are not fully included in
a rise in value of the debt securities market, the Fund may: (i) buy
Futures, or (ii) buy calls on such Futures or on securities. Covered
calls and puts may also be written on debt securities to attempt to
increase the Fund's income. When hedging to attempt to protect against
declines in the dollar value of a foreign currency-denominated security
or in a payment on such security, the Fund may: (a) buy puts on that
foreign currency or on foreign currency Futures, (b) write calls on that
currency or on such Futures, or (c) enter into Forward Contracts at a
different rate than the spot ("cash") rate. Additional information about
the Hedging Instruments the Fund may use is provided below. At present,
the Fund does not intend to purchase or sell Futures, Forward Contracts
or options on Futures if, after any such purchase, the sum of initial
margin deposits on Futures and premiums paid for related options exceeds
5% of the value of the Fund's total assets. Certain options on foreign
currencies are considered related options for this purpose. The Fund may
in the future employ hedging instruments and strategies that are not
presently contemplated to the extent such investment methods are
consistent with the Fund's investment objective, are legally permissible
and are adequately disclosed.
The Fund's Custodian, or a securities depository acting for the
Custodian, will act as the Fund's escrow agent, through the facilities of
the Options Clearing Corporation ("OCC"), as to the investments on which
the Fund has written options that are traded on exchanges, or as to other
acceptable escrow securities, so that no margin will be required from the
Fund for such option transactions. OCC will release the securities
covering a call on the expiration of the call or when the Fund enters into
a closing purchase transaction. Call writing affects the Fund's turnover
rate and the brokerage commissions it pays. Commissions, normally higher
than on general securities transactions, are payable on writing or
purchasing a call.
- Writing Covered Call Options. When the Fund writes a call on an
investment, it receives a premium and agrees to sell the callable
investment to a purchaser of a corresponding call during the call period
(usually not more than 9 months) at a fixed exercise price (which may
differ from the market price of the underlying investment), regardless of
market price changes during the call period. To terminate its obligation
on a call it has written, the Fund may purchase a corresponding call in
a "closing purchase transaction." A profit or loss will be realized,
depending upon whether the net of the amount of the option transaction
costs and the premium received on the call written was more or less than
the price of the call subsequently purchased. A profit may also be
realized if the call expires unexercised, because the Fund retains the
underlying investment and the premium received. Any such profits are
considered short-term capital gains for Federal income tax purposes, and
when distributed by the Fund are taxable as ordinary income. If the Fund
could not effect a closing purchase transaction due to lack of a market,
it would have to hold the callable investment until the call expired or
was exercised.
The Fund may write calls on foreign currencies. A call written on
a foreign currency by the Fund is "covered" if the Fund owns the
underlying foreign currency covered by the call or has an absolute and
immediate right to acquire that foreign currency without additional cash
consideration (or for additional cash consideration held in a segregated
account by its custodian) upon conversion or exchange of other foreign
currency held in its portfolio. A call written by the Fund on a foreign
currency is for cross-hedging purposes if it is not covered, but is
designed to provide a hedge against a decline (due to an adverse change
in the exchange rate) in the U.S. dollar value of a security which the
Fund owns or has the right to acquire and which is denominated in the
currency underlying the option. In such circumstances, the Fund
collateralizes the option by maintaining in a segregated account with the
Fund's custodian, cash or Government securities in an amount not less than
the value of the underlying foreign currency in U.S. dollars marked-to-
market daily.
The Fund may also write calls on Futures without owning a futures
contract, provided that at the time the call is written, the Fund covers
the call by segregating in escrow an equivalent dollar amount of liquid
assets. The Fund will segregate additional liquid assets if the value of
the escrowed assets drops below 100% of the current value of the Future.
In no circumstances would an exercise notice require the Fund to deliver
a futures contract; it would simply put the Fund in a short futures
position, which is permitted by the Fund's hedging policies.
- Writing Put Options. A put option on securities gives the
purchaser the right to sell, and the writer the obligation to buy, the
underlying investment at the exercise price during the option period.
Writing a put covered by segregated liquid assets equal to the exercise
price of the put has the same economic effect to the Fund as writing a
covered call. The premium the Fund receives from writing a put option
represents a profit, as long as the price of the underlying investment
remains above the exercise price. However, the Fund has also assumed the
obligation during the option period to buy the underlying investment from
the buyer of the put at the exercise price, even though the value of the
investment may fall below the exercise price. If the put expires
unexercised, the Fund (as the writer of the put) realizes a gain in the
amount of the premium less transaction costs. If the put is exercised,
the Fund must fulfill its obligation to purchase the underlying investment
at the exercise price, which will usually exceed the market value of the
investment at that time. In that case, the Fund may incur a loss, equal
to the sum of the sale price of the underlying investment and the premium
received minus the sum of the exercise price and any transaction costs
incurred.
When writing put options on securities or on foreign currencies, to
secure its obligation to pay for the underlying security, the Fund will
deposit in escrow liquid assets with a value equal to or greater than the
exercise price of the underlying securities. The Fund therefore forgoes
the opportunity of investing the segregated assets or writing calls
against those assets. As long as the obligation of the Fund as the put
writer continues, it may be assigned an exercise notice by the exchange
or broker-dealer through whom such option was sold, requiring the Fund to
exchange currency at the specified rate of exchange or to take delivery
of the underlying security against payment of the exercise price. The
Fund may have no control over when it may be required to purchase the
underlying security, since it may be assigned an exercise notice at any
time prior to the termination of its obligation as the writer of the put.
This obligation terminates upon expiration of the put, or such earlier
time at which the Fund effects a closing purchase transaction by
purchasing a put of the same series as that previously sold. Once the
Fund has been assigned an exercise notice, it is thereafter not allowed
to effect a closing purchase transaction.
The Fund may effect a closing purchase transaction to realize a
profit on an outstanding put option it has written or to prevent an
underlying security from being put. Furthermore, effecting such a closing
purchase transaction will permit the Fund to write another put option to
the extent that the exercise price thereof is secured by the deposited
assets, or to utilize the proceeds from the sale of such assets for other
investments by the Fund. The Fund will realize a profit or loss from a
closing purchase transaction if the cost of the transaction is less or
more than the premium received from writing the option. As above for
writing covered calls, any and all such profits described herein from
writing puts are considered short-term capital gains for Federal tax
purposes, and when distributed by the Fund, are taxable as ordinary
income.
- Purchasing Calls and Puts. When the Fund purchases a call (other
than in a closing purchase transaction), it pays a premium and has the
right to buy the underlying investment from a seller of a corresponding
call on the same investment during the call period at a fixed exercise
price. The Fund benefits only if the call is sold at a profit or if,
during the call period, the market price of the underlying investment is
above the sum of the call price plus the transaction costs and the premium
paid for the call and the call is exercised. If the call is not exercised
or sold (whether or not at a profit), it will become worthless at its
expiration date and the Fund will lose its premium payment and the right
to purchase the underlying investment.
When the Fund purchases a put, it pays a premium and has the right
to sell the underlying investment to a seller of a put on a corresponding
investment during the put period at a fixed exercise price. Buying a put
on securities or Futures the Fund owns enables the Fund to attempt to
protect itself during the put period against a decline in the value of the
underlying investment below the exercise price by selling the underlying
investment at the exercise price to a seller of a corresponding put. If
the market price of the underlying investment is equal to or above the
exercise price and, as a result, the put is not exercised or resold, the
put will become worthless at its expiration date and the Fund will lose
its premium payment and the right to sell the underlying investment; the
put may, however, be sold prior to expiration (whether or not at a
profit).
Purchasing a put on either Futures or on securities it does not own
permits the Fund either to resell the put or, if applicable, to buy the
underlying investment and sell it at the exercise price. The resale price
of the put will vary inversely with the price of the underlying
investment. If the market price of the underlying investment is above the
exercise price, and, as a result, the put is not exercised, the put will
become worthless on its expiration date. In the event of a decline in
price of the underlying investment, the Fund could exercise or sell the
put at a profit to attempt to offset some or all of its loss on its
portfolio securities. When the Fund purchases a put on a Future or
security not held by it, the put protects the Fund to the extent that the
prices of the underlying Future or securities move in a similar pattern
to the prices of the securities in the Fund's portfolio.
- Futures. No payment is paid or received by the Fund on the
purchase or sale of a Future. Upon entering into a Futures transaction,
the Fund will be required to deposit an initial margin payment with the
futures commission merchant (the "futures broker"). Initial margin
payments will be deposited with the Fund's Custodian in an account
registered in the futures broker's name; however, the futures broker can
gain access to that account only under specified conditions. As the
Future is marked to market to reflect changes in its market value,
subsequent margin payments, called variation margin, will be paid to or
by the futures broker on a daily basis. At any time prior to expiration
of the Future, the Fund may elect to close out its position by taking an
opposite position, at which time a final determination of variation margin
is made and additional cash is required to be paid by or released to the
Fund. Any loss or gain is realized. All futures transactions are
effected through a clearinghouse associated with the exchange on which the
contracts are traded.
- Forward Contracts. The Fund may enter into foreign currency
exchange contracts ("Forward Contracts"), which obligate the seller to
deliver and the purchaser to take a specific amount of foreign currency
at a specific future date for a fixed price. A Forward Contract involves
bilateral obligations of one party to purchase, and another party to sell,
a specific currency at a future date (which may be any fixed number of
days from the date of the contract agreed upon by the parties), at a price
set at the time the contract is entered into. These contracts are traded
in the interbank market conducted directly between currency traders
(usually large commercial banks) and their customers. The Fund may enter
into a Forward Contract in order to "lock in" the U.S. dollar price of a
security denominated in a foreign currency which it has purchased or sold
but which has not yet settled, or to protect against a possible loss
resulting from an adverse change in the relationship between the U.S.
dollar and a foreign currency.
There is a risk that use of Forward Contracts may reduce the gain
that would otherwise result from a change in the relationship between the
U.S. dollar and a foreign currency. To attempt to limit its exposure to
loss under Forward Contracts in a particular foreign currency, the Fund
limits its use of these contracts to the amount of its assets denominated
in that currency or denominated in a closely-correlated foreign currency.
Forward Contracts include standardized foreign currency futures contracts
which are traded on exchanges and are subject to procedures and
regulations applicable to other Futures. The Fund may also enter into a
Forward Contract to sell a foreign currency denominated in a currency
other than that in which the underlying security is denominated. This is
done in the expectation that there is a greater correlation between the
foreign currency of the Forward Contract and the foreign currency of the
underlying investment than between the U.S. dollar and the foreign
currency of the underlying investment. This technique is referred to as
"cross hedging." The success of cross hedging is dependent on many
factors, including the ability of the Manager to correctly identify and
monitor the correlation between foreign currencies and the U.S. dollar.
To the extent that the correlation is not identical, the Fund may
experience losses or gains on both the underlying security and the cross
currency hedge.
The Fund may use Forward Contracts to protect against uncertainty in
the level of future exchange rates. The use of Forward Contracts does not
eliminate fluctuations in the prices of the underlying securities the Fund
owns or intends to acquire, but it does fix a rate of exchange in advance.
In addition, although Forward Contracts limit the risk of loss due to a
decline in the value of the hedged currencies, at the same time they limit
any potential gain that might result should the value of the currencies
increase.
There is no limitation as to the percentage of the Fund's assets that
may be committed to foreign currency exchange contracts. The Fund does
not enter into such forward contracts or maintain a net exposure in such
contracts to the extent that the Fund would be obligated to deliver an
amount of foreign currency in excess of the value of the Fund's assets
denominated in that currency, or enter into a "cross hedge," unless it is
denominated in a currency or currencies that the Manager believes will
have price movements that tend to correlate closely with the currency in
which the investment being hedged is denominated. See "Tax Aspects of
Covered Calls and Hedging Instruments" below for a discussion of the tax
treatment of foreign currency exchange contracts.
The Fund may enter into Forward Contracts with respect to specific
transactions. For example, when the Fund enters into a contract for the
purchase or sale of a security denominated in a foreign currency, or when
the Fund anticipates receipt of dividend payments in a foreign currency,
the Fund may desire to "lock-in" the U.S. dollar price of the security or
the U.S. dollar equivalent of such payment by entering into a Forward
Contract, for a fixed amount of U.S. dollars per unit of foreign currency,
for the purchase or sale of the amount of foreign currency involved in the
underlying transaction ("transaction hedge"). The Fund will thereby be
able to protect itself against a possible loss resulting from an adverse
change in the relationship between the currency exchange rates during the
period between the date on which the security is purchased or sold, or on
which the payment is declared, and the date on which such payments are
made or received.
The Fund may also use Forward Contracts to lock in the U.S. dollar
value of portfolio positions ("position hedge"). In a position hedge, for
example, when the Fund believes that foreign currency may suffer a
substantial decline against the U.S. dollar, it may enter into a forward
sale contract to sell an amount of that foreign currency approximating the
value of some or all of the Fund's portfolio securities denominated in
such foreign currency, or when the Fund believes that the U.S. dollar may
suffer a substantial decline against a foreign currency, it may enter into
a forward purchase contract to buy that foreign currency for a fixed
dollar amount. In this situation the Fund may, in the alternative, enter
into a forward contract to sell a different foreign currency for a fixed
U.S. dollar amount where the Fund believes that the U.S. dollar value of
the currency to be sold pursuant to the forward contract will fall
whenever there is a decline in the U.S. dollar value of the currency in
which portfolio securities of the Fund are denominated ("cross hedge").
The Fund's Custodian will place cash or U.S. Government securities
or other liquid high-quality debt securities in a separate account of the
Fund having a value equal to the aggregate amount of the Fund's
commitments under forward contracts to cover its short positions. If the
value of the securities placed in the separate account declines,
additional cash or securities will be placed in the account on a daily
basis so that the value of the account will equal the amount of the Fund's
commitments with respect to such contracts. As an alternative to
maintaining all or part of the separate account, the Fund may purchase a
call option permitting the Fund to purchase the amount of foreign currency
being hedged by a forward sale contract at a price no higher than the
forward contract price, or the Fund may purchase a put option permitting
the Fund to sell the amount of foreign currency subject to a forward
purchase contract at a price as high or higher than the forward contract
price. Unanticipated changes in currency prices may result in poorer
overall performance for the Fund than if it had not entered into such
contracts.
The precise matching of the Forward Contract amounts and the value
of the securities involved will not generally be possible because the
future value of such securities in foreign currencies will change as a
consequence of market movements in the value of these securities between
the date the Forward Contract is entered into and the date it is sold.
Accordingly, it may be necessary for the Fund to purchase additional
foreign currency on the spot (i.e., cash) market (and bear the expense of
such purchase), if the market value of the security is less than the
amount of foreign currency the Fund is obligated to deliver and if a
decision is made to sell the security and make delivery of the foreign
currency. Conversely, it may be necessary to sell on the spot market some
of the foreign currency received upon the sale of the portfolio security
if its market value exceeds the amount of foreign currency the Fund is
obligated to deliver. The projection of short-term currency market
movements is extremely difficult, and the successful execution of a short-
term hedging strategy is highly uncertain. Forward Contracts involve the
risk that anticipated currency movements will not be accurately predicted,
causing the Fund to sustain losses on these contracts and transactions
costs.
At or before the maturity of a Forward Contract requiring the Fund
to sell a currency, the Fund may either sell a portfolio security and use
the sale proceeds to make delivery of the currency or retain the security
and offset its contractual obligation to deliver the currency by
purchasing a second contract pursuant to which the Fund will obtain, on
the same maturity date, the same amount of the currency that it is
obligated to deliver. Similarly, the Fund may close out a Forward
Contract requiring it to purchase a specified currency by entering into
a second contract entitling it to sell the same amount of the same
currency on the maturity date of the first contract. The Fund would
realize a gain or loss as a result of entering into such an offsetting
Forward Contract under either circumstance to the extent the exchange rate
or rates between the currencies involved moved between the execution dates
of the first contract and offsetting contract.
The cost to the Fund of engaging in Forward Contracts varies with
factors such as the currencies involved, the length of the contract period
and the market conditions then prevailing. Because Forward Contracts are
usually entered into on a principal basis, no fees or commissions are
involved. Because such contracts are not traded on an exchange, the Fund
must evaluate the credit and performance risk of each particular
counterparty under a Forward Contract.
Although the Fund values its assets daily in terms of U.S. dollars,
it does not intend to convert its holdings of foreign currencies into U.S.
dollars on a daily basis. The Fund may convert foreign currency from time
to time, and investors should be aware of the costs of currency
conversion. Foreign exchange dealers do not charge a fee for conversion,
but they do seek to realize a profit based on the difference between the
prices at which they buy and sell various currencies. Thus, a dealer may
offer to sell a foreign currency to the Fund at one rate, while offering
a lesser rate of exchange should the Fund desire to resell that currency
to the dealer.
- Interest Rate Swap Transactions. Swap agreements entail both
interest rate risk and credit risk. There is a risk that, based on
movements of interest rates in the future, the payments made by the Fund
under a swap agreement will have been greater than those received by it.
Credit risk arises from the possibility that the counterparty will
default. If the counterparty to an interest rate swap defaults, the
Fund's loss will consist of the net amount of contractual interest
payments that the Fund has not yet received. The Manager will monitor the
creditworthiness of counterparties to the Fund's interest rate swap
transactions on an ongoing basis. The Fund will enter into swap
transactions with appropriate counterparties pursuant to master netting
agreements.
A master netting agreement provides that all swaps done between the
Fund and that counterparty under the master agreement shall be regarded
as parts of an integral agreement. If on any date amounts are payable in
the same currency in respect of one or more swap transactions, the net
amount payable on that date in that currency shall be paid. In addition,
the master netting agreement may provide that if one party defaults
generally or on one swap, the counterparty may terminate the swaps with
that party. Under such agreements, if there is a default resulting in a
loss to one part, the measure of that part's damages is calculated by
reference to the average cost of a replacement swap with respect to each
swap (i.e., the mark-to-market value at the time of the termination of
each swap). The gains and losses on all swaps are then netted, and the
result is the counterparty's gain or loss on termination. The termination
of all swaps and the netting of gains and losses on termination is
generally referred to as "aggregation." The Fund will not invest more
than 25% of its assets in interest rate swap transactions.
- Regulatory Aspects of Hedging Instruments. The Fund is required to
operate within certain guidelines and restrictions with respect to its use
of futures and options thereon as established by the Commodities Futures
Trading Commission ("CFTC"). In particular, the Fund is excluded from
registration as a "commodity pool operator" if it complies with the
requirements of Rule 4.5 adopted by the CFTC. The Rule does not limit the
percentage of the Fund's assets that may be used for Futures margin and
related option premiums for a bona fide hedging position. However, under
the Rule the Fund must limit its aggregate initial futures margin and
related option premiums to no more than 5% of the Fund's net assets for
hedging strategies that are not considered bona fide hedging strategies
under the Rule.
Transactions in options by the Fund are subject to limitations
established by option exchanges governing the maximum number of options
that may be written or held by a single investor or group of investors
acting in concert, regardless of whether the options were written or
purchased on the same or different exchanges or are held in one or more
accounts or through one or more different exchanges or through one or more
brokers. Thus the number of options which the Fund may write or hold may
be affected by options written or held by other entities, including other
investment companies having the same adviser as the Fund (or an adviser
that is an affiliate of the Fund's adviser). The exchanges also impose
position limits on Futures transactions. An exchange may order the
liquidation of positions found to be in violation of those limits and may
impose certain other sanctions.
Due to requirements under the Investment Company Act, when the Fund
purchases a Future, the Fund will maintain, in a segregated account or
accounts with its Custodian, cash or readily-marketable, short-term
(maturing in one year or less) debt instruments in an amount equal to the
market value of the securities underlying such Future, less the margin
deposit applicable to it.
- Tax Aspects of Covered Calls and Hedging Instruments. The Fund
intends to qualify as a "regulated investment company" under the Internal
Revenue Code (although it reserves the right not to qualify). That
qualification enables the Fund to "pass through" its income and realized
capital gains to shareholders without having to pay tax on them. This
avoids a "double tax" on that income and capital gains, since shareholders
normally will be taxed on the dividends and capital gains they receive
from the Fund (unless the Fund's shares are held in a retirement account
or the shareholder is otherwise exempt from tax). One of the tests for
the Fund's qualification as a regulated investment company is that less
than 30% of its gross income must be derived from gains realized on the
sale of securities held for less than three months. To comply with this
30% cap, the Fund will limit the extent to which it engages in the
following activities, but will not be precluded from them: (i) selling
investments, including Futures, held for less than three months, whether
or not they were purchased on the exercise of a call held by the Fund;
(ii) purchasing options which expire in less than three months; (iii)
effecting closing transactions with respect to calls or puts written or
purchased less than three months previously; (iv) exercising puts or calls
held by the Fund for less than three months; or (v) writing calls on
investments held less than three months.
Certain foreign currency exchange contracts (Forward Contracts) in
which the Fund may invest are treated as "section 1256 contracts." Gains
or losses relating to section 1256 contracts generally are characterized
under the Internal Revenue Code as 60% long-term and 40% short-term
capital gains or losses. However, foreign currency gains or losses
arising from certain section 1256 contracts (including Forward Contracts)
generally are treated as ordinary income or loss. In addition, section
1256 contracts held by the Fund at the end of each taxable year are
"marked-to-market" with the result that unrealized gains or losses are
treated as though they were realized. These contracts also may be marked-
to-market for purposes of the excise tax applicable to investment company
distributions and for other purposes under rules prescribed pursuant to
the Internal Revenue Code. An election can be made by the Fund to exempt
these transactions from this marked-to-market treatment.
Certain Forward Contracts entered into by the Fund may result in
"straddles" for Federal income tax purposes. The straddle rules may
affect the character of gains (or losses) realized by the Fund on straddle
positions. Generally, a loss sustained on the disposition of a
position(s) making up a straddle is allowed only to the extent such loss
exceeds any unrecognized gain in the offsetting positions making up the
straddle. Disallowed loss is generally allowed at the point where there
is no unrecognized gain in the offsetting positions making up the
straddle, or the offsetting position is disposed of.
Under the Internal Revenue Code, gains or losses attributable to
fluctuations in exchange rates which occur between the time the Fund
accrues interest or other receivables or accrues expenses or other
liabilities denominated in a foreign currency and the time the Fund
actually collects such receivables or pays such liabilities generally are
treated as ordinary income or ordinary loss. Similarly, on disposition
of debt securities denominated in a foreign currency and on disposition
of foreign currency forward contracts, gains or losses attributable to
fluctuations in the value of a foreign currency between the date of
acquisition of the security or contract and the date of disposition also
are treated as an ordinary gain or loss. Currency gains and losses are
offset against market gains and losses before determining a net "section
988" gain or loss under the Internal Revenue Code, which may increase or
decrease the amount of the Fund's investment company income available for
distribution to its shareholders.
- Risks of Hedging With Options and Futures. An option position may
be closed out only on a market that provides secondary trading for options
of the same series, and there is no assurance that a liquid secondary
market will exist for any particular option. In addition to the risks
associated with hedging that are discussed in the Prospectus and above,
there is a risk in using short hedging by (i) selling Futures or (ii)
purchasing puts on broadly-based indices or Futures to attempt to protect
against declines in the value of the Fund's equity securities. The risk
is that the prices of Futures will correlate imperfectly with the behavior
of the cash (i.e., market value) prices of the Fund's equity securities.
The ordinary spreads between prices in the cash and futures markets are
subject to distortions, due to differences in the natures of those
markets. First, all participants in the futures markets are subject to
margin deposit and maintenance requirements. Rather than meeting
additional margin deposit requirements, investors may close out futures
contracts through offsetting transactions which could distort the normal
relationship between the cash and futures markets. Second, the liquidity
of the futures markets depends on participants entering into offsetting
transactions rather than making or taking delivery. To the extent
participants decide to make or take delivery, liquidity in the futures
markets could be reduced, thus producing distortion. Third, from the
point of view of speculators, the deposit requirements in the futures
markets are less onerous than margin requirements in the securities
markets. Therefore, increased participation by speculators in the futures
markets may cause temporary price distortions.
The risk of imperfect correlation increases as the composition of the
Fund's portfolio diverges from the securities included in the applicable
index. To compensate for the imperfect correlation of movements in the
price of the portfolio securities being hedged and movements in the price
of the hedging instruments, the Fund may use hedging instruments in a
greater dollar amount than the dollar amount of portfolio securities being
hedged if the historical volatility of the prices of such portfolio
securities being hedged is more than the historical volatility of the
applicable index. It is also possible that if the Fund has used hedging
instruments in a short hedge, the market may advance and the value of the
securities held in the Fund's portfolio may decline. If that occurred, the
Fund would lose money on the hedging instruments and also experience a
decline in value in its portfolio securities. However, while this could
occur for a very brief period or to a very small degree, over time the
value of a diversified portfolio of securities will tend to move in the
same direction as the indices upon which the hedging instruments are
based.
If the Fund uses hedging instruments to establish a position in the
securities markets as a temporary substitute for the purchase of
particular securities (long hedging) by buying Futures and/or calls on
such Futures, on securities, or on broadly-based indices, it is possible
that the market may decline. If the Fund then concludes not to invest in
such securities at that time because of concerns as to a possible further
market decline or for other reasons, the Fund will realize a loss on the
hedging instruments that is not offset by a reduction in the price of the
securities purchased.
Other Investment Restrictions
The Fund's most significant investment restrictions are set forth in
the Prospectus. There are additional investment restrictions that the Fund
must follow that are also fundamental policies. Fundamental policies and
the Fund's investment objective cannot be changed without the vote of a
"majority" of the Fund's outstanding voting securities. Under the
Investment Company Act, such a "majority" vote is defined as the vote of
the holders of the lesser of (1) 67% or more of the shares present or
represented by proxy at a shareholder meeting, if the holders of more than
50% of the outstanding shares are present, or (2) more than 50% of the
outstanding shares.
Under these additional restrictions, the Fund cannot:
- buy the securities of any company for the purpose of exercising
management control;
- invest in commodities or in commodities contracts, other than the
Hedging Instruments permitted by any of its other fundamental policies,
whether or not any such Hedging Instrument is considered to be a commodity
or a commodity contract;
- buy or sell real estate; however, the Fund may invest in debt
securities secured by real estate or interests therein or issued by
companies, including real estate investment trusts, which invest in real
estate or interests therein;
- buy securities on margin, except that the Fund may make margin
deposits in connection with any of the Hedging Instruments which it may
use;
- lend money, but the Fund may enter into repurchase agreements or
invest in all or a portion of an issue of bonds, debentures, commercial
paper, or other similar corporate obligations of the types that are
usually purchased by institutions, whether or not publicly distributed;
- mortgage or pledge any of its assets; however this does not
prohibit the Fund from pledging its assets for collateral arrangements
contemplated in connection with the use of Hedging Instruments;
- underwrite securities of other companies except to the extent that,
in connection with the disposition of its portfolio investments, it may
be deemed to be an underwriter for purposes of the Securities Act;
- buy and retain securities of any issuer if those officers,
directors or trustees of the Fund or the Manager who beneficially own more
than .5% of the securities of such issuer together own more than 5% of the
securities of such issuer;
- invest more than 5% of total assets through open-market purchases
in other investment companies, except in connection with a merger,
consolidation, reorganization or acquisition of assets; or
- invest in oil, gas or other mineral exploration or development
programs.
In connection with the qualification of its shares in certain states,
the Fund has undertaken that in addition to the above, it will not (i)
invest more than 5% of its net assets in warrants, and that warrants not
listed on the New York and American Stock Exchanges shall not exceed 2%
of its net assets, (ii) invest more than 5% of its total assets in
securities of issuers, including their predecessors, that have been in
continuous operation for less than three continuous years; (iii) invest
in real estate limited partnerships, or (iv) invest in oil, gas or other
mineral leases. In the event that the Fund's shares cease to be qualified
under such laws or if such undertaking otherwise ceases to be operative,
the Fund would not be subject to such restriction. The percentage
restrictions described above and in the Prospectus apply only at the time
of investment and require no action by the Fund as a result of subsequent
changes in relative values.
For purposes of the Fund's policy not to concentrate its assets
described under the second investment restriction in the Prospectus, the
Fund has adopted the industry classifications set forth in Appendix B to
this Statement of Additional Information. This is not a fundamental
policy.
How the Fund Is Managed
Organization and History. As a Massachusetts business trust, the Fund is
not required to hold, and does not plan to hold, regular annual meetings
of shareholders. The Fund will hold meetings when required to do so by
the Investment Company Act or other applicable law, or when a shareholder
meeting is called by the Trustees or upon proper request of the
shareholders. Shareholders have the right, upon the declaration in
writing or vote of two-thirds of the outstanding shares of the Fund, to
remove a Trustee. The Trustees will call a meeting of shareholders to
vote on the removal of a Trustee upon the written request of the record
holders of 10% of its outstanding shares. In addition, if the Trustees
receive a request from at least 10 shareholders (who have been
shareholders for at least six months) holding shares of the Fund valued
at $25,000 or more or holding at least 1% of the Fund's outstanding
shares, whichever is less, stating that they wish to communicate with
other shareholders to request a meeting to remove a Trustee, the Trustees
will then either make the Fund's shareholder list available to the
applicants or mail their communication to all other shareholders at the
applicants' expense, or the Trustees may take such other action as set
forth under Section 16(c) of the Investment Company Act.
The Fund's Declaration of Trust contains an express disclaimer of
shareholder or Trustee liability for the Fund's obligations, and provides
for indemnification and reimbursement of expenses out of its property for
any shareholder held personally liable for its obligations. The
Declaration of Trust also provides that the Fund shall, upon request,
assume the defense of any claim made against any shareholder for any act
or obligation of the Fund and satisfy any judgment thereon. Thus, while
Massachusetts law permits a shareholder of a business trust (such as the
Fund) to be held personally liable as a "partner" under certain
circumstances, the risk of a Fund shareholder incurring financial loss on
account of shareholder liability is limited to the relatively remote
circumstances in which the Fund would be unable to meet its obligations
described above. Any person doing business with the Trust, and any
shareholder of the Trust, agrees under the Trust's Declaration of Trust
to look solely to the assets of the Trust for satisfaction of any claim
or demand which may arise out of any dealings with the Trust, and the
Trustees shall have no personal liability to any such person, to the
extent permitted by law.
Trustees And Officers of the Fund. The Fund's Trustees and officers
and their principal occupations and business affiliations during the past
five years are set forth below. The address of each Trustee and officer
is Two World Trade Center, New York, New York 10048-0203, unless another
address is listed below. All of the Trustees are also trustees of
Oppenheimer Fund, Oppenheimer Global Fund, Oppenheimer Growth Fund,
Oppenheimer Target Fund, Oppenheimer Discovery Fund, Oppenheimer Global
Growth & Income Fund, Oppenheimer Global Emerging Growth Fund, Oppenheimer
Tax-Free Bond Fund, Oppenheimer New York Tax-Exempt Fund, Oppenheimer
California Tax-Exempt Fund, Oppenheimer Multi-State Tax-Exempt Trust,
Oppenheimer Asset Allocation Fund, Oppenheimer U.S. Government Trust,
Oppenheimer Multi-Sector Income Trust and Oppenheimer Multi-Government
Trust (the "New York-based Oppenheimer funds"). Messrs. Spiro, Bishop,
Bowen, Donohue, Farrar and Zack respectively hold the same offices with
the other New York-based Oppenheimer funds as with the Fund. As of
September 18, 1995, the officers and Trustees of the Fund as a group owned
of record or beneficially less than 1% of each class of shares of the
Fund. The foregoing does not include shares held of record by an employee
benefit plan for employees of the Manager (for which plan one of the
officers listed below, Mr. Donohue, is a trustee), other than the shares
beneficially owned under that plan by the officers of the Fund listed
below.
Leon Levy, Chairman of the Board of Trustees; Age: 70
31 West 52nd Street, New York, New York 10019
General Partner of Odyssey Partners, L.P. (investment partnership)
and Chairman of Avatar Holdings, Inc. (real estate development).
Leo Cherne, Trustee; Age: 83
122 East 42nd Street, New York, New York 10168
Chairman Emeritus of the International Rescue Committee
(philanthropic organization); formerly Executive Director of The
Research Institute of America.
Robert G. Galli, Trustee*; Age: 62
Vice Chairman of the Manager and Vice President and Counsel of
Oppenheimer Acquisition Corp., the Manager's parent holding company;
formerly he held the following positions: a director of the Manager
and Oppenheimer Funds Distributor, Inc. (the "Distributor"), Vice
President and a director of HarbourView Asset Management Corporation
("HarbourView") and Centennial Asset Management Corporation
("Centennial"), investment adviser subsidiaries of the Manager, a
director of Shareholder Financial Services, Inc. ("SFSI") and
Shareholder Services, Inc. ("SSI"), transfer agent subsidiaries of
the Manager, an officer of other Oppenheimer funds and Executive Vice
President and General Counsel of the Manager and the Distributor.
Benjamin Lipstein, Trustee; Age: 72
591 Breezy Hill Road, Hillsdale, New York 12529
Professor Emeritus of Marketing, Stern Graduate School of Business
Administration, New York University; a Director of Sussex Publishers,
Inc. (Publishers of Psychology Today and Mother Earth News and Spy
Magazine, L.P.)
Elizabeth B. Moynihan, Trustee; Age: 66
801 Pennsylvania Avenue, N.W., Washington, DC 20004
Author and architectural historian; a trustee of the Freer Gallery
of Art (Smithsonian Institution), the Institute of Fine Arts (New
York University), National Building Museum; a member of the Trustees
Council, Preservation League of New York State; a member of the Indo-
U.S. Sub-Commission on Education and Culture.
Kenneth A. Randall, Trustee; Age: 68
6 Whittaker's Mill, Williamsburg, Virginia 23185
A director of Dominion Resources, Inc. (electric utility holding
company), Dominion Energy, Inc. (electric power and oil & gas
producer), Enron-Dominion Cogen Corp. (cogeneration company), Kemper
Corporation (insurance and financial services company), and Fidelity
Life Association (mutual life insurance company); formerly Chairman
of the Federal Deposit Insurance Corporation, Chairman of the Board
of ICL, Inc. (information systems), and President and Chief Executive
Officer of The Conference Board, Inc. (international economic and
business research).
_____________________________________
* A Trustee who is an "interested person" of the Fund as defined in the
Investment Company Act.
Edward V. Regan, Trustee; Age: 65
40 Park Avenue, New York, New York 10016
President of Jerome Levy Institute, Bard College; a member of the
U.S. Competitiveness Policy Council; a director or GranCare, Inc.
(healthcare provider); formerly New York State Comptroller and
trustee, New York State and Local Retirement Fund.
Russell S. Reynolds, Jr., Trustee; Age: 63
200 Park Avenue, New York, New York 10166
Founder Chairman of Russell Reynolds Associates, Inc. (executive
recruiting); Chairman of Directors Publication, Inc. (consulting and
publishing); a trustee of Mystic Seaport Museum, International House,
Greenwich Hospital and the Greenwich Historical Society.
Sidney M. Robbins, Trustee; Age: 83
50 Overlook Road, Ossining, New York 10562
Chase Manhattan Professor Emeritus of Financial Institutions,
Graduate School of Business, Columbia University; Visiting Professor
of Finance, University of Hawaii; a director of The Korea Fund, Inc.
(a closed-end investment company); a member of the Board of Advisors,
Olympus Private Placement Fund, L.P.; Professor Emeritus of Finance,
Adelphi University.
Donald W. Spiro, President and Trustee*; Age: 69
Chairman Emeritus and a director of the Manager; formerly Chairman
of the Manager and the Distributor.
Pauline Trigere, Trustee; Age: 82
498 Seventh Avenue, New York, New York 10018
Chairman and Chief Executive Officer of Trigere, Inc. (design and
sale of women's fashions).
Clayton K. Yeutter, Trustee; Age: 64
1325 Merrie Ridge Road, McLean, Virginia 22101
Of Counsel to Hogan & Hartson (a law firm); a director of B.A.T.
Industries, Ltd. (tobacco and financial services), Caterpillar, Inc.
(machinery), ConAgra, Inc. (food and agricultural products), Farmers
Insurance Company (insurance), FMC Corp. (chemicals and machinery),
Lindsay Manufacturing Co. (irrigation equipment), Texas Instruments,
Inc. (electronics) and The Vigoro Corporation (fertilizer
manufacturer); formerly (in descending chronological order)
Counsellor to the President (Bush) for Domestic Policy, Chairman of
the Republican National Committee, Secretary of the U.S. Department
of Agriculture, and U.S. Trade Representative.
Frank Jennings, Vice President and Portfolio Manager; Age: ____.
Formerly Managing Director of Global Equities at Mitchell Hutchins
Asset Management, Inc., a subsidiary of Paine Webber, Inc., prior to
which, he was a global funds manager for AIG Global Investors.
William L. Wilby, Vice President; Age: 51
Vice President of the Manager and HarbourView; an officer of other
Oppenheimer funds; formerly international investment strategist at
Brown Brothers, Harriman & Co., prior to which he was a Managing
Director and Portfolio Manager at AIG Global Investors.
_____________________________________
* A Trustee who is an "interested person" of the Fund as defined in the
Investment Company Act.
Andrew J. Donohue, Secretary; Age: 45
Executive Vice President and General Counsel of the Manager and the
Distributor; an officer of other Oppenheimer funds; formerly Senior
Vice President and Associate General Counsel of the Manager and the
Distributor, prior to which he was a partner in Kraft & McManimon (a
law firm), an officer of First Investors Corporation (a broker-
dealer) and First Investors Management Company, Inc. (broker-dealer
and investment adviser), and a director and an officer of First
Investors Family of Funds and First Investors Life Insurance Company.
George C. Bowen, Treasurer; Age: 59
3410 South Galena Street, Denver, Colorado 80231
Senior Vice President and Treasurer of the Manager; Vice President
and Treasurer of the Distributor and HarbourView; Senior Vice
President, Treasurer and Assistant Secretary and a director of
Centennial; Vice President, Treasurer and Secretary of SSI and SFSI;
an officer of other Oppenheimer funds.
Robert G. Zack, Assistant Secretary; Age: 47
Senior Vice President and Associate General Counsel of the Manager;
Assistant Secretary of SSI and SFSI; an officer of other Oppenheimer
funds.
Robert J. Bishop, Assistant Treasurer; Age: 36
3410 South Galena Street, Denver, Colorado 80231
Assistant Vice President of the Manager/Mutual Fund Accounting; an
officer of other Oppenheimer funds; previously a Fund Controller for
the Manager, prior to which he was an Accountant for Yale &
Seffinger, P.C., an accounting firm; and previously an Accountant and
Commissions Supervisor for Stuart James Company Inc., a broker-
dealer.
Scott Farrar, Assistant Treasurer; Age: 30
3410 South Galena Street, Denver, Colorado 80231
Assistant Vice President of the Manager/Mutual Fund Accounting; an
officer of other Oppenheimer funds; previously a Fund Controller for
the Manager, prior to which he was an International Mutual Fund
Supervisor for Brown Brothers Harriman & Co. (a bank) and previously
a Senior Fund Accountant for State Street Bank & Trust Company.
- Remuneration of Trustees. The officers of the Fund are affiliated
with the Manager; they and the Trustees of the Fund who are affiliated
with the Manager (Messrs. Galli and Spiro; Mr. Spiro is also an officer)
receive no salary or fee from the Fund. The Trustees of the Fund
(excluding Messrs. Galli and Spiro) received the total amounts shown below
from all 17 of the New York-based Oppenheimer funds (including the Fund)
listed in the first paragraph of this section (and from Oppenheimer Global
Environment Fund, a former New York-based Oppenheimer funds), for services
in the positions shown:
<TABLE>
<CAPTION>
Retirement Total Compensation
Aggregate Benefits Accrued From All
Compensation as Part of New York-based
Name and Position From Fund Fund Expenses Oppenheimer Funds1
<S> <C> <C> <C>
Leon Levy, Chairman and Trustee $2,284 $5,617 $141,000.00
Leo Cherne, Audit Committee $1,115 $2,742 $ 68,800.00
Member and Trustee
Edmund T. Delaney, $1,397 $3,434 $ 86,200.00
Study Committee
Member and Trustee
Benjamin Lipstein, $1,397 $3,434 $ 86,200.00
Study Committee
Member and Trustee
Elizabeth B. Moynihan, $ 982 $2,415 $ 60,625.00
Study Committee
Member and3 Trustee
Kenneth A. Randall, $1,270 $3,124 $ 78,400.00
Audit Committee Member
and Trustee
Edward V. Regan, $ 911 $2,241 $ 56,275.00
Audit Committee
Member3 and Trustee
Russell S. Reynolds, Jr., Trustee $ 845 $2,077 $ 52,100.00
Sidney M. Robbins, Study $1,979 $4,867 $122,100.00
Committee Chairman, Audit
Committee Vice-Chairman
and Trustee
Pauline Trigere, Trustee $ 845 $2,077 $ 52,100.00
Clayton K. Yeutter, Trustee $ 845 $2,077 $ 52,100.00
<FN>
______________________
1 For the 1994 calendar year.
2 Board and Committee positions held during a portion of the period
shown.
3 Committee position held during a portion of the period shown.
</TABLE>
The Fund has adopted a retirement plan that provides for payment to a
retired Trustee of up to 80% of the average compensation paid during that
Trustee's five years of service in which the highest compensation was
received. A Trustee must serve in that capacity for any of the New York-
based Oppenheimer funds for at least 15 years to be eligible for the
maximum payment. Because each Trustee's retirement benefits will depend
on the amount of the Trustee's future compensation and length of service,
the amount of these benefits cannot be determined as of this time nor can
we estimate the number of years of credited service that will be used to
determine those benefits. No sums were accrued during the fiscal year
ended September 30, 1994 for the Fund's projected retirement benefit
obligations.
- Major Shareholders. As of September 18, 1995, no person owned of
record or was known by the Fund to own beneficially 5% or more of the
shares of (i) the Fund in the aggregate or (ii) any class of the Fund
except for Merrill, Lynch, Pierce, Fenner & Smith, Inc., which was the
record owner of 147,255 Class C shares (representing approximately 7.82%
of the then outstanding Class C shares).
The Manager and Its Affiliates. The Manager is wholly-owned by
Oppenheimer Acquisition Corp. ("OAC"), a holding company controlled by
Massachusetts Mutual Life Insurance Company. OAC is also owned in part
by certain of the Manager's directors and officers, some of whom also
serve as officers of the Fund, and two of whom (Mr. Galli and Mr. Spiro)
serve as Trustees of the Fund.
The Manager and the Fund have a Code of Ethics. It is designed to
detect and prevent improper personal trading by certain employees,
including portfolio managers, that would compete with or take advantage
of the Fund's portfolio transactions. Compliance with the Code of Ethics
is carefully monitored and strictly enforced by the Manager.
- The Investment Advisory Agreement. The investment advisory
agreement between the Manager and the Fund requires the Manager, at its
expense, to provide the Fund with adequate office space, facilities and
equipment, and to provide and supervise the activities of all
administrative and clerical personnel required to provide effective
corporate administration for the Fund, including the compilation and
maintenance of records with respect to its operations, the preparation and
filing of specified reports, and composition of proxy materials and
registration statements for continuous public sale of shares of the Fund.
Expenses not expressly assumed by the Manager under the advisory
agreement or by the Distributor under the General Distributor's Agreement
are paid by the Fund. The advisory agreement lists examples of expenses
paid by the Fund, the major categories of which relate to interest, taxes,
brokerage commissions, fees to certain Trustees, legal and audit expenses,
custodian and transfer agent expenses, share issuance costs, certain
printing and registration costs and non-recurring expenses, including
litigation costs. For the Fund's fiscal years ended September 30, 1992,
1993, and 1994, the management fees paid by the Fund to the Manager were
$278,376, $449,323, and $945,062, respectively.
The advisory agreement contains no expense limitation. However,
independently of the advisory agreement, the Manager has undertaken that
the total expenses of the Fund in any fiscal year (including the
management fee but excluding taxes, interest, brokerage commissions,
distribution assistance payments and extraordinary expenses such as
litigation costs) shall not exceed the most stringent expense limitation
imposed under state law applicable to the Fund. Pursuant to the
undertaking, the Manager's fee will be reduced at the end of a month so
that there will not be any accrued but unpaid liability under this
undertaking. Currently, the most stringent state expense limitation is
imposed by California, and limits the Fund's expenses (with specified
exclusions) to 2.5% of the first $30 million of average annual net assets,
2% of the next $70 million of average annual net assets, and 1.5% of
average annual net assets in excess of $100 million. The Manager reserves
the right to terminate or amend the undertaking at any time. Any
assumption of the Fund's expenses under this limitation would lower the
Fund's overall expense ratio and increase its total return during any
period in which expenses are limited.
The advisory agreement provides that in the absence of willful
misfeasance, bad faith or gross negligence in the performance of its
duties, or reckless disregard of its obligations and duties under the
advisory agreement, the Manager is not liable for any loss resulting from
a good faith error or omission on its part with respect to any of its
duties thereunder. The advisory agreement permits the Manager to act as
investment adviser for any other person, firm or corporation and to use
the name "Oppenheimer" in connection with other investment companies for
which it may act as investment adviser or general distributor. If the
Manager shall no longer act as investment adviser to the Fund, the right
of the Fund to use the name "Oppenheimer" as part of its name may be
withdrawn.
- The Distributor. Under its General Distributor's Agreement with the
Fund, the Distributor acts as the Fund's principal underwriter in the
continuous public offering of the Fund's Class A, Class B and Class C
shares but is not obligated to sell a specific number of shares. Expenses
normally attributable to sales (excluding payments under the Distribution
and Service Plans but including advertising and the cost of printing and
mailing prospectuses, other than those furnished to existing
shareholders), are borne by the Distributor. During the Fund's fiscal
years ended September 30, 1992, 1993, and 1994, the aggregate sales
charges on sales of the Fund's Class A shares were $444,168, $429,513, and
$1,020,885, respectively, of which the Distributor and an affiliated
broker-dealer retained in the aggregate $105,976, $130,709, and $286,660
in those respective years. During the Fund's fiscal year ended September
30, 1994, contingent deferred sales charges collected on the Fund's Class
C shares totalled $3,352, all of which the Distributor retained. For
additional information about distribution of the Fund's shares and the
expenses connected with such activities, please refer to "Distribution and
Service Plans," below. Class B shares were not publicly offered during
the fiscal year ended September 30, 1994, and no contingent deferred sales
charges were collected.
- The Transfer Agent. Oppenheimer Shareholder Services, the Fund's
Transfer Agent, is responsible for maintaining the Fund's shareholder
registry and shareholder accounting records, and for shareholder servicing
and administrative functions.
Brokerage Policies of the Fund
Brokerage Provisions of the Investment Advisory Agreement. One of the
duties of the Manager under the advisory agreement is to arrange the
portfolio transactions for the Fund. The advisory agreement contains
provisions relating to the employment of broker-dealers ("brokers") to
effect the Fund's portfolio transactions. In doing so, the Manager is
authorized by the advisory agreement to employ broker-dealers, including
"affiliated" brokers, as that term is defined in the Investment Company
Act, as may, in its best judgment based on all relevant factors,
implement the policy of the Fund to obtain, at reasonable expense, the
"best execution" (prompt and reliable execution at the most favorable
price obtainable) of such transactions. The Manager need not seek
competitive commission bidding but is expected to minimize the commissions
paid to the extent consistent with the interest and policies of the Fund
as established by its Board of Trustees. Purchases of securities from
underwriters include a commission or concession paid by the issuer to the
underwriter, and purchases from dealers include a spread between the bid
and asked price.
Under the advisory agreement, the Manager is authorized to select
brokers that provide brokerage and/or research services for the Fund
and/or the other accounts over which the Manager or its affiliates have
investment discretion. The commissions paid to such brokers may be higher
than another qualified broker would have charged if a good faith
determination is made by the Manager that the commission is fair and
reasonable in relation to the services provided. Subject to the foregoing
considerations, the Manager may also consider sales of shares of the Fund
and other investment companies managed by the Manager or its affiliates
as a factor in the selection of brokers for the Fund's portfolio
transactions.
Description of Brokerage Practices Followed by the Manager. Subject to
the provisions of the advisory agreement, and the procedures and rules
described above, allocations of brokerage are generally made by the
Manager's portfolio traders based upon recommendations from the Manager's
portfolio managers. In certain instances, portfolio managers may directly
place trades and allocate brokerage, also subject to the provisions of the
advisory agreement and the procedures and rules described above.
Regardless, brokerage is allocated under the supervision of the Manager's
executive officers. Transactions in securities other than those for which
an exchange is the primary market are generally done with principals or
market makers. Brokerage commissions are paid primarily for effecting
transactions in listed securities or for certain fixed-income agency
transactions in the secondary market and are otherwise paid only if it
appears likely that a better price or execution can be obtained. When the
Fund engages in an option transaction, ordinarily the same broker will be
used for the purchase or sale of the option and any transaction in the
securities to which the option relates. When possible, concurrent orders
to purchase or sell the same security by more than one of the accounts
managed by the Manager or its affiliates are combined. The transactions
effected pursuant to such combined orders are averaged as to price and
allocated in accordance with the purchase or sale orders actually placed
for each account.
The research services provided by a particular broker may be useful
only to one or more of the advisory accounts of the Manager and its
affiliates, and investment research received for the commissions of those
other accounts may be useful both to the Fund and one or more of such
other accounts. Such research, which may be supplied by a third party at
the instance of a broker, includes information and analyses on particular
companies and industries as well as market or economic trends and
portfolio strategy, receipt of market quotations for portfolio
evaluations, information systems, computer hardware and similar products
and services. If a research service also assists the Manager in a non-
research capacity (such as bookkeeping or other administrative functions),
then only the percentage or component that provides assistance to the
Manager in the investment decision-making process may be paid in
commission dollars. The Board of Trustees has permitted the Manager to
use concessions on fixed-price offerings to obtain research, in the same
manner as is permitted for agency transactions. The Board has also
permitted the Manager to use stated commissions on secondary fixed-income
agency trades to obtain research where the broker has represented to
Manager that: (i) the trade is not from or for the broker's own inventory,
(ii) the trade was executed by the broker on an agency basis at the stated
commission, and (iii) the trade is not a riskless principal transaction.
The research services provided by brokers broaden the scope and
supplement the research activities of the Manager, by making available
additional views for consideration and comparisons, and by enabling the
Manager to obtain market information for the valuation of securities held
in the Fund's portfolio or being considered for purchase. The Board of
Trustees, including the "independent" Trustees of the Fund (those Trustees
of the Fund who are not "interested persons" as defined in the Investment
Company Act, and who have no direct or indirect financial interest in the
operation of the advisory agreement or the Distribution Plans described
below) annually reviews information furnished by the Manager as to the
commissions paid to brokers furnishing such services so that the Board may
ascertain whether the amount of such commissions was reasonably related
to the value or benefit of such services.
During the Fund's fiscal years ended September 30, 1992, 1993, and
1994, total brokerage commissions paid by the Fund (not including spreads
or concessions on principal transactions on a net trade basis) were
$93,625, $1,462,229, and $720,379, respectively. During the fiscal year
ended September 30, 1994, $216,351 was paid to brokers as commissions in
return for research services; the aggregate dollar amount of those
transactions was $66,940,906. The transactions giving rise to those
commissions were allocated in accordance with the Manager's internal
allocation procedures.
Performance of the Fund
Total Return Information. As described in the Prospectus, from time to
time the "average annual total return," "cumulative total return,"
"average annual total return at net asset value" and "total return at net
asset value" of an investment in a class of shares of the Fund may be
advertised. An explanation of how these total returns are calculated for
each class and the components of those calculations is set forth below.
No calculations are presented below for Class B shares because no shares
of that class were publicly offered during the fiscal year ended September
30, 1994.
The Fund's advertisements of its performance data must, under
applicable rules of the Securities and Exchange Commission, include the
average annual total returns for each class of shares of the Fund for the
1, 5, and 10-year periods (or the life of the class, if less) ending as
of the most recently-ended calendar quarter prior to the publication of
the advertisement. This enables an investor to compare the Fund's
performance to the performance of other funds for the same periods.
However, a number of factors should be considered before using such
information as a basis for comparison with other investments. An
investment in the Fund is not insured; its returns and share prices are
not guaranteed and normally will fluctuate on a daily basis. When
redeemed, an investor's shares may be worth more or less than their
original cost. Returns for any given past period are not a prediction or
representation by the Fund of future returns. The returns of Class A,
Class B and Class C shares of the Fund are affected by portfolio quality,
the type of investments the Fund holds and its operating expenses
allocated to the particular class.
- Average Annual Total Returns. The "average annual total return" of
each class is an average annual compounded rate of return for each year
in a specified number of years. It is the rate of return based on the
change in value of a hypothetical initial investment of $1,000 ("P" in the
formula below) held for a number of years ("n") to achieve an Ending
Redeemable Value ("ERV") of that investment, according to the following
formula:
( ERV ) 1/n
(-----) -1 = Average Annual Total Return
( P )
- Cumulative Total Returns. The cumulative "total return" calculation
measures the change in value of a hypothetical investment of $1,000 over
an entire period of years. Its calculation uses some of the same factors
as average annual total return, but it does not average the rate of return
on an annual basis. Cumulative total return is determined as follows:
ERV - P
- ------- = Total Return
P
In calculating total returns for Class A shares, the current maximum
sales charge of 5.75% (as a percentage of the offering price) is deducted
from the initial investment ("P") (unless the return is shown at net asset
value, as described below). For Class B shares, the payment of the
applicable contingent deferred sales charge (5.0% for the first year, 4.0%
for the second year, 3.0% for the third and fourth years, 2.0% for the
fifth year, 1.0% for the sixth year and none thereafter) is applied to the
investment result for the period shown (unless the total return is shown
at net asset value, as described below). For Class C shares, a 1.0%
contingent deferred sales charge is applied to the investment result for
the one-year period (or less). Total returns also assume that all
dividends and capital gains distributions during the period are reinvested
to buy additional shares at net asset value per share, and that the
investment is redeemed at the end of the period. The "average annual
total returns" on an investment in Class A shares of the Fund for the
fiscal year ended September 30, 1994 and for the period October 22, 1990
(commencement of operations) to September 30, 1994 were 7.41% and 9.44%,
respectively. The cumulative "total return" on Class A shares for the
period October 22, 1990 (commencement of operations) to September 30, 1994
was 42.65%. The cumulative total return on Class C shares for the period
from December 1, 1993 (the commencement of the offering of the shares)
through September 30, 1994 was 6.41%.
- Total Returns at Net Asset Value. From time to time the Fund may also
quote an average annual total return at net asset value or a cumulative
total return at net asset value for Class A, Class B or Class C shares.
Each is based on the difference in net asset value per share at the
beginning and the end of the period for a hypothetical investment in that
class of shares (without considering front-end or contingent deferred
sales charges) and takes into consideration the reinvestment of dividends
and capital gains distributions. The cumulative total return at net asset
value of the Fund's Class A shares for the period from October 22, 1990
(commencement of operations) to September 30, 1994 was 51.35%. The average
annual total returns at net asset value for the fiscal year ended
September 30, 1994 and for the period October 22, 1990 (commencement of
operations) through September 30, 1994, for Class A shares were 13.96% and
11.10%, respectively. The cumulative total return at net asset value on
the Fund's Class C shares for the fiscal period from December 1, 1993
through September 30, 1994 was 7.41%.
Total return information may be useful to investors in reviewing the
Fund's performance. However, when comparing total return of an investment
in the Fund with that of other alternatives, investors should understand
that as the Fund is an aggressive equity fund seeking capital
appreciation, its shares are subject to greater market risks and
volatility than shares of funds having other investment objectives and
that the Fund is designed for investors who are willing to accept greater
risk of loss in the hopes of realizing greater gains.
Other Performance Comparisons. From time to time the Fund may publish the
ranking of its Class A, Class B or Class C shares by Lipper Analytical
Services, Inc. ("Lipper"), a widely-recognized independent mutual fund
monitoring service. Lipper monitors the performance of regulated
investment companies, including the Fund, and ranks their performance for
various periods based on categories relating to investment objectives.
The performance of the Fund is ranked against (i) all other funds, (ii)
all other "balanced" funds and (iii) all other "balanced" funds in a
specific size category. The Lipper performance rankings are based on
total returns that include the reinvestment of capital gain distributions
and income dividends but do not take sales charges or taxes into
consideration.
From time to time the Fund may publish the ranking of the
performance of its Class A, Class B or Class C shares by Morningstar,
Inc., an independent mutual fund monitoring service that ranks mutual
funds, including the Fund, monthly in broad investment categories (equity,
taxable bond, municipal bond and hybrid) based on risk-adjusted investment
return. Investment return measures a fund's three, five and ten-year
average annual total returns (when available) in excess of 90-day U.S.
Treasury bill returns after considering sales charges and expenses. Risk
measures fund performance below 90-day U.S. Treasury bill monthly returns.
Risk and investment return are combined to produce star rankings
reflecting performance relative to the average fund in a fund's category.
Five stars is the "highest" ranking (top 10%), four stars is "above
average" (next 22.5%), three stars is "average" (next 35%), two stars is
"below average" (next 22.5%) and one star is "lowest" (bottom 10%).
Morningstar ranks the Fund in relation to other rated growth and income
funds. Rankings are subject to change.
From time to time, the Fund may include in its advertisements and
sales literature performance information about the Fund cited in other
newspapers and periodicals, such as The New York Times, which may include
performance quotations from other sources, including Lipper.
The total return on an investment in the Fund's Class A, Class B or
Class C shares may be compared with performance for the same period of
either the Morgan Stanley Capital International World Index or the Lehman
Aggregate Bond Index, as described in the Prospectus. The performance of
each index includes a factor for the reinvestment of income dividends, but
does not reflect reinvestment of capital gains, expenses or taxes. The
performance of the Fund's Class A, Class B or Class C shares may also be
compared in publications to (i) the performance of various market indices
or to other investments for which reliable performance data is available,
and (ii) to averages, performance rankings or other benchmarks prepared
by recognized mutual fund statistical services.
Investors may also wish to compare the Fund's Class A, Class B or Class
C return to the returns on fixed income investments available from banks
and thrift institutions, such as certificates of deposit, ordinary
interest-paying checking and savings accounts, and other forms of fixed
or variable time deposits, and various other instruments such as Treasury
bills. However, the Fund's returns and share price are not guaranteed by
the FDIC or any other agency and will fluctuate daily, while bank
depository obligations may be insured by the FDIC and may provide fixed
rates of return, and Treasury bills are guaranteed as to principal and
interest by the U.S. Government.
From time to time, the Fund's Manager may publish rankings or ratings
of the Manager (or Transfer Agent) or the investor services provided by
them to shareholders of the Oppenheimer funds, other than performance
rankings of the Oppenheimer funds themselves. Those ratings or rankings
of shareholder/investor services by third parties may compare the
Oppenheimer funds' services to those of other mutual fund families
selected by the rating or ranking services and may be based upon the
opinions of the rating or ranking service itself, based on its research
or judgment, or based upon surveys of investors, brokers, shareholders or
others.
Distribution and Service Plans
The Fund has adopted a Service Plan for Class A shares and Distribution
and Service Plans for Class B and Class C shares under Rule 12b-1 of the
Investment Company Act pursuant to which the Fund will make payments to
the Distributor in connection with the distribution and/or servicing of
the shares of that class, as described in the Prospectus. Each Plan has
been approved by a vote of (i) the Board of Trustees of the Fund,
including a majority of the Independent Trustees, cast in person at a
meeting called for the purpose of voting on that Plan, and (ii) the
holders of a "majority" (as defined in the Investment Company Act) of the
shares of each class. For the Distribution and Service Plan for Class B
and Class C shares, that vote was cast by the Manager as the sole initial
holder of Class B and Class C shares of the Fund.
In addition, under the Plans the Manager and the Distributor, in their
sole discretion, from time to time may use their own resources (which, in
the case of the Manager, may include profits from the advisory fee it
receives from the Fund) to make payments to brokers, dealers or other
financial institutions (each is referred to as a "Recipient" under the
Plans) for distribution and administrative services they perform at no
cost to the Fund. The Distributor and the Manager may, in their sole
discretion, increase or decrease the amount of payments they make from
their own resources to Recipients.
Unless terminated as described below, each Plan continues in effect
from year to year but only as long as its continuance is specifically
approved at least annually by the Fund's Board of Trustees and its
Independent Trustees by a vote cast in person at a meeting called for the
purpose of voting on such continuance. Either Plan may be terminated at
any time by the vote of a majority of the Independent Trustees or by the
vote of the holders of a "majority" (as defined in the Investment Company
Act) of the outstanding shares of that class. Neither Plan may be amended
to increase materially the amount of payments to be made unless such
amendment is approved by shareholders of the class affected by the
amendment. In addition, because Class B shares of the Fund automatically
convert into Class A shares after six years, the Fund is required to
obtain the approval of Class B as well as Class A shareholders for a
proposed amendment to the Class A Plan that would materially increase the
amount to be paid by Class A shareholders under the Class A Plan. Such
approval must be by a "majority of the Class A and Class B shares (as
defined in the Investment Company Act), voting separately by class. All
material amendments must be approved by the Independent Trustees.
While the Plans are in effect, the Treasurer of the Fund shall
provide separate written reports to the Fund's Board of Trustees at least
quarterly on the amount of all payments made pursuant to each Plan, the
purpose for which each payment was made and the identity of each Recipient
that received any payment. Those reports, including the allocations on
which they are based, will be subject to the review and approval of the
Independent Trustees in the exercise of their fiduciary duty. Each Plan
further provides that while it is in effect, the selection and nomination
of those Trustees of the Fund who are not "interested persons" of the Fund
is committed to the discretion of the Independent Trustees. This does not
prevent the involvement of others in such selection and nomination if the
final decision on selection or nomination is approved by a majority of the
Independent Trustees.
Under the Plans, no payment will be made to any Recipient in any
quarter if the aggregate net asset value of all Fund shares held by the
Recipient for itself and its customers, did not exceed a minimum amount,
if any, that may be determined from time to time by a majority of the
Fund's Independent Trustees. Initially, the Board of Trustees has set the
fees at the maximum rate and set no requirement for a minimum amount of
assets.
For the fiscal year ended September 30, 1994, payments under the Class
A Plan totalled $288,568, all of which was paid by the Distributor to
Recipients, including $9,123 paid to an affiliate of the Distributor. Any
unreimbursed expenses incurred by the Distributor with respect to Class
A shares for any fiscal year may not be recovered in subsequent years.
Payments received by the Distributor under the Plan for Class A shares
will not be used to pay any interest expense, carrying charge, or other
financial costs, or allocation of overhead by the Distributor.
The Class B and the Class C Plans allow the service fee payment to be
paid by the Distributor to Recipients in advance for the first year such
shares are outstanding, and thereafter on a quarterly basis, as described
in the Prospectus. The advance payment is based on the net asset value
of the shares sold. An exchange of shares does not entitle the Recipient
to an advance service fee payment. In the event shares are redeemed
during the first year that the shares are outstanding, the Recipient will
be obligated to repay a pro rata portion of the advance payment to the
Distributor. Payments made under the Class C Plan during the fiscal
period ended September 30, 1994 totalled $165,352, all paid by the
Distributor to Recipients, including $3,351 paid to a dealer affiliated
with the Distributor. No payments were made under the Class B Plan for
the fiscal year ended September 30, 1994 because no shares of that class
were outstanding during that period.
Although the Class B Plan and the Class C Plan permits the Distributor
to retain both the asset-based sales charges and the service fees on such
shares, or to pay Recipients the service fee on a quarterly basis, without
payment in advance, the Distributor presently intends to pay the service
fee to Recipients in the manner described above. A minimum holding period
may be established from time to time under the Class B and the Class C
Plan by the Board. Initially, the Board has set no minimum holding
period. All payments under the Class B and the Class C Plans are subject
to the limitations imposed by the Rules of Fair Practice of the National
Association of Securities Dealers, Inc. on payments of asset-based sales
charges and service fees.
Asset-based sales charge payments are designed to permit an investor
to purchase shares of the Fund without the assessment of a front-end sales
load and at the same time permit the Distributor to compensate brokers and
dealers in connection with the sale of Class B and Class C shares of the
Fund. The Class B and the Class C Plans provide for the Distributor to
be compensated at a flat rate, whether the Distributor's distribution
expenses are more or less than the amounts paid by the Fund during that
period. Such payments are made in recognition that the Distributor (i)
pays sales commissions to authorized brokers and dealers at the time of
sale, as described in the Prospectus, (ii) may finance such commissions
and/or the advance of the service fee payment to Recipients under those
Plans, (iii) employs personnel to support distribution of shares, and (iv)
may bear the costs of sales literature, advertising and prospectuses
(other than those furnished to current shareholders) and state "blue sky"
registration fees.
ABOUT YOUR ACCOUNT
How To Buy Shares
Alternative Sales Arrangements - Class A, Class B and Class C Shares. The
availability of three classes of shares permits the individual investor
to choose the method of purchasing shares that is more beneficial to the
investor depending on the amount of the purchase, the length of time the
investor expects to hold shares and other relevant circumstances.
Investors should understand that the purpose and function of the deferred
sales charge and asset-based sales charge with respect to Class B and
Class C shares are the same as those of the initial sales charge with
respect to Class A shares. Any salesperson or other person entitled to
receive compensation for selling Fund shares may receive different
compensation with respect to one class of shares than the other. The
Distributor will not accept any order for $500,000 or $1 million or more
of Class B or Class C shares, respectively, on behalf of a single investor
(not including dealer "street name" or omnibus accounts) because generally
it will be more advantageous for that investor to purchase Class A shares
of the Fund instead.
The three classes of shares each represent an interest in the same
portfolio investments of the Fund. However, each class has different
shareholder privileges and features. The net income attributable to Class
B and Class C shares and the dividends payable on Class B and Class C
shares will be reduced by incremental expenses borne solely by that class,
including the asset-based sales charge to which Class B and Class C shares
are subject.
The conversion of Class B shares to Class A shares after six years is
subject to the continuing availability of a private letter ruling from the
Internal Revenue Service, or an opinion of counsel or tax adviser, to the
effect that the conversion of Class B shares does not constitute a taxable
event for the holder under Federal income tax law. If such a revenue
ruling or opinion is no longer available, the automatic conversion feature
may be suspended, in which event no further conversions of Class B shares
would occur while such suspension remained in effect. Although Class B
shares could then be exchanged for Class A shares on the basis of relative
net asset value of the two classes, without the imposition of a sales
charge or fee, such exchange could constitute a taxable event for the
holder, and absent such exchange, Class B shares might continue to be
subject to the asset-based sales charge for longer than six years.
The methodology for calculating the net asset value, dividends and
distributions of the Fund's Class A, Class B and Class C shares recognizes
two types of expenses. General expenses that do not pertain specifically
to any class are allocated pro rata to the shares of each class, based on
the percentage of the net assets of such class to the Fund's total assets,
and then equally to each outstanding share within a given class. Such
general expenses include (i) management fees, (ii) legal, bookkeeping and
audit fees, (iii) printing and mailing costs of shareholder reports,
Prospectuses, Statements of Additional Information and other materials for
current shareholders, (iv) fees to Independent Trustees, (v) custodian
expenses, (vi) share issuance costs, (vii) organization and start-up
costs, (viii) interest, taxes and brokerage commissions, and (ix) non-
recurring expenses, such as litigation costs. Other expenses that are
directly attributable to a class are allocated equally to each outstanding
share within that class. Such expenses include (a) Distribution Plan
fees, (b) incremental transfer and shareholder servicing agent fees and
expenses, (c) registration fees and (d) shareholder meeting expenses, to
the extent that such expenses pertain to a specific class rather than to
the Fund as a whole.
Determination of Net Asset Values Per Share. The net asset values per
share of Class A, Class B and Class C shares of the Fund are determined
as of the close of business of The New York Stock Exchange (the
"Exchange") on each day that the Exchange is open, by dividing the Fund's
net assets attributable to a class by the number of shares of that class
that are outstanding. The Exchange normally closes at 4:00 P.M. New York
time, but may close earlier on some days (for example, in case of weather
emergencies or on days falling before a holiday). The Exchange's most
recent annual holiday schedule (which is subject to change) states that
it will close on New Year's Day, Presidents' Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. It
may also close on other days. The Fund may invest a substantial portion
of its assets in foreign securities primarily listed on foreign exchanges
which may trade on Saturdays or customary U.S. business holidays on which
the Exchange is closed. Because the Fund's net asset value will not be
calculated on those days, the Fund's net asset values per share of Class
A, Class B and Class C shares may be significantly affected on such days
when shareholders may not purchase or redeem shares.
The Fund's Board of Trustees has established procedures for the
valuation of the Fund's securities, generally as follows: (i) equity
securities traded on a securities exchange or on NASDAQ for which last
sale information is regularly reported are valued at the last reported
sale price on their primary exchange or NASDAQ that day (or, in the
absence of sales that day, at values based on the last sales prices of the
preceding trading day, or closing bid and asked prices); (ii) securities
actively traded on a foreign securities exchange are valued at the last
sales price available to the pricing service approved by the Fund's Board
of Trustees or to the Manager as reported by the principal exchange on
which the security is traded; (iii) unlisted foreign securities or listed
foreign securities not actively traded are valued as in (i) above, if
available, or at the mean between "bid" and "asked" prices obtained from
active market makers in the security on the basis of reasonable inquiry;
(iv) long-term debt securities having a remaining maturity in excess of
60 days are valued at the mean between the "bid" and "asked" prices
determined by a portfolio pricing service approved by the Fund's Board of
Trustees or obtained from active market makers in the security on the
basis of reasonable inquiry; (v) debt instruments having a maturity of
more than one year when issued, and non-money market type instruments
having a maturity of one year or less when issued, which have a remaining
maturity of 60 days or less are valued at the mean between the "bid" and
"asked" prices determined by a pricing service approved by the Fund's
Board of Trustees or obtained from active market makers in the security
on the basis of reasonable inquiry; (vi) money market-type debt securities
having a maturity of less than one year when issued that having a
remaining maturity of 60 days or less are valued at cost, adjusted for
amortization of premiums and accretion of discounts; and (vii) securities
(including restricted securities) not having readily-available market
quotations are valued at fair value under the Board's procedures; and
(viii) securities traded on foreign exchanges are valued at the closing
or last sales prices reported on a principal exchange, or, if none, at the
mean between closing bid and asked prices and reflect prevailing rates of
exchange taken from the closing price on the London foreign exchange
market that day.
Trading in securities on European and Asian exchanges and over-the-
counter markets is normally completed before the close of the Exchange.
Events affecting the values of foreign securities traded in stock markets
that occur between the time their prices are determined and the close of
the Exchange will not be reflected in the Fund's calculation of net asset
value unless the Board of Trustees or the Manager, under procedures
established by the Board of Trustees, determines that the particular event
would materially affect the Fund's net asset value, in which case an
adjustment would be made. Foreign currency will be valued as close to the
time fixed for the valuation date as is reasonably practicable. The
values of securities denominated in foreign currency will be converted to
U.S. dollars at the prevailing rates of exchange at the time of valuation.
Puts, calls and Futures held by the Fund are valued at the last sales
price on the principal exchange on which they are traded, or on NASDAQ,
as applicable, or, if there are no sales that day, in accordance with (i),
above. Forward currency contracts are valued at the closing price on the
London foreign exchange market. When the Fund writes an option, an amount
equal to the premium received by the Fund is included in the Fund's
Statement of Assets and Liabilities as an asset, and an equivalent
deferred credit is included in the liability section. The deferred credit
is "marked-to-market" to reflect the current market value of the option.
In determining the Fund's gain on investments, if a call written by the
Fund is exercised, the proceeds are increased by the premium received.
If a call or put written by the Fund expires, the Fund has a gain in the
amount of the premium; if the Fund enters into a closing purchase
transaction, it will have a gain or loss depending on whether the premium
was more or less than the cost of the closing transaction. If the Fund
exercises a put it holds, the amount the Fund receives on its sale of the
underlying investment is reduced by the amount of premium paid by the
Fund.
AccountLink. When shares are purchased through AccountLink, each purchase
must be at least $25.00. Shares will be purchased on the regular business
day the Distributor is instructed to initiate the Automated Clearing House
("ACH") transfer to buy the shares. Dividends will begin to accrue on
shares purchased by the proceeds of ACH transfers on the business day the
Fund receives Federal Funds for the purchase through the ACH system before
the close of The New York Stock Exchange. The Exchange normally closes
at 4:00 P.M., but may close earlier on certain days. If Federal Funds are
received on a business day after the close of the Exchange, the shares
will be purchased and dividends will begin to accrue on the next regular
business day. The proceeds of ACH transfers are normally received by the
Fund 3 days after the transfers are initiated. The Distributor and the
Fund are not responsible for any delays in purchasing shares resulting
from delays in ACH transmissions.
Reduced Sales Charges. As discussed in the Prospectus, a reduced sales
charge rate may be obtained for Class A shares under Right of Accumulation
and Letters of Intent because of the economies of sales efforts and
reduction in expenses realized by the Distributor, dealers and brokers
making such sales. No sales charge is imposed in certain other
circumstances described in the Prospectus because the Distributor incurs
little or no selling expenses. The term "immediate family" refers to
one's spouse, children, grandchildren, grandparents, parents, parents-in-
law, brothers and sisters, sons- and daughters-in-law, a sibling's spouse
and a spouse's siblings.
- The Oppenheimer Funds. The Oppenheimer funds are those mutual funds
for which the Distributor acts as the distributor or the sub-distributor
and include the following:
Oppenheimer Tax-Free Bond Fund
Oppenheimer New York Tax-Exempt Fund
Oppenheimer California Tax-Exempt Fund
Oppenheimer Intermediate Tax-Exempt Fund
Oppenheimer Insured Tax-Exempt Fund
Oppenheimer Main Street California Tax-Exempt Fund
Oppenheimer Florida Tax-Exempt Fund
Oppenheimer Pennsylvania Tax-Exempt Fund
Oppenheimer New Jersey Tax-Exempt Fund
Oppenheimer Fund
Oppenheimer Discovery Fund
Oppenheimer Target Fund
Oppenheimer Growth Fund
Oppenheimer Equity Income Fund
Oppenheimer Value Stock Fund
Oppenheimer Asset Allocation Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer Main Street Income & Growth Fund
Oppenheimer High Yield Fund
Oppenheimer Champion Income Fund
Oppenheimer Bond Fund
Oppenheimer U.S. Government Trust
Oppenheimer Limited-Term Government Fund
Oppenheimer Global Fund
Oppenheimer Global Emerging Growth Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Strategic Income Fund
Oppenheimer Strategic Income & Growth Fund
Oppenheimer International Bond Fund
and the following "Money Market Funds":
Oppenheimer Money Market Fund, Inc.
Oppenheimer Cash Reserves
Centennial Money Market Trust
Centennial Tax Exempt Trust
Centennial Government Trust
Centennial New York Tax Exempt Trust
Centennial California Tax Exempt Trust
Centennial America Fund, L.P.
Daily Cash Accumulation Fund, Inc.
There is an initial sales charge on the purchase of Class A shares of
each of the Oppenheimer funds except Money Market Funds (under certain
circumstances described herein, redemption proceeds of Money Market Fund
shares may be subject to a contingent deferred sales charge).
- Letters of Intent. A Letter of Intent (referred to as a "Letter")
is an investor's statement in writing to the Distributor of the intention
to purchase Class A shares or Class A and Class B shares of the Fund and
other OppenheimerFunds during a 13-month period (the "Letter of Intent
period"), which may, at the investor's request, include purchases made up
to 90 days prior to the date of the Letter. The Letter states the
investor's intention to make the aggregate amount of purchases of shares
which, when added to the investor's holdings of shares of those funds,
will equal or exceed the amount specified in the Letter. Purchases made
at net asset value without sales charge do not count toward satisfying the
amount of the Letter. A letter enables an investor to count the Class A
and Class B shares purchased under the Letter to obtain the reduced sales
charge rate on purchases of Class A shares of the Fund (and other
OppenheimerFunds) that applies under the Right of Accumulation to current
purchases of Class A shares. Each purchase of Class A shares under the
Letter will be made at the public offering price (including the sales
charge) that applies to a single lump-sum purchase of shares in the amount
intended to be purchased under the Letter.
In submitting a Letter, the investor makes no commitment to purchase
shares, but if the investor's purchases of shares within the Letter of
Intent period, when added to the value (at offering price) of the
investor's holdings of shares on the last day of that period, do not equal
or exceed the intended purchase amount, the investor agrees to pay the
additional amount of sales charge applicable to such purchases, as set
forth in "Terms of Escrow," below (as those terms may be amended from time
to time). The investor agrees that shares equal in value to 5% of the
intended purchase amount will be held in escrow by the Transfer Agent
subject to the Terms of Escrow. Also, the investor agrees to be bound by
the terms of the Prospectus, this Statement of Additional Information and
the Application used for such Letter of Intent, and if such terms are
amended, as they may be from time to time by the Fund, that those
amendments will apply automatically to existing Letters of Intent.
For purchases of shares of the Fund and other OppenheimerFunds by
OppenheimerFunds prototype 401(k) plans under a Letter of Intent, the
Transfer Agent will not hold shares in escrow. If the intended purchase
amount under the Letter entered into by an OppenheimerFunds prototype
401(k) plan is not purchased by the plan by the end of the Letter of
Intent period, there will be no adjustment of commissions paid to the
broker-dealer or financial institution of record for accounts held in the
name of that plan.
If the total eligible purchases made during the Letter of Intent period
do not equal or exceed the intended purchase amount, the commissions
previously paid to the dealer of record for the account and the amount of
sales charge retained by the Distributor will be adjusted to the rates
applicable to actual purchases. If total eligible purchases during the
Letter of Intent period exceed the intended purchase amount and exceed the
amount needed to qualify for the next sales charge rate reduction set
forth in the applicable prospectus, the sales charges paid will be
adjusted to the lower rate, but only if and when the dealer returns to the
Distributor the excess of the amount of commissions allowed or paid to the
dealer over the amount of commissions that apply to the actual amount of
purchases. The excess commissions returned to the Distributor will be
used to purchase additional shares for the investor's account at the net
asset value per share in effect on the date of such purchase, promptly
after the Distributor's receipt thereof.
In determining the total amount of purchases made under a Letter,
shares redeemed by the investor prior to the termination of the Letter of
Intent period will be deducted. It is the responsibility of the dealer
of record and/or the investor to advise the Distributor about the Letter
in placing any purchase orders for the investor during the Letter of
Intent period. All of such purchases must be made through the
Distributor.
- Terms of Escrow That Apply to Letters of Intent.
1. Out of the initial purchase (or subsequent purchases if necessary)
made pursuant to a Letter, shares of the Fund equal in value to 5% of the
intended purchase amount specified in the Letter shall be held in escrow
by the Transfer Agent. For example, if the intended purchase amount is
$50,000, the escrow shall be shares valued in the amount of $2,500
(computed at the public offering price adjusted for a $50,000 purchase).
Any dividends and capital gains distributions on the escrowed shares will
be credited to the investor's account.
2. If the intended purchase amount specified under the Letter is
completed within the thirteen-month Letter of Intent period, the escrowed
shares will be promptly released to the investor.
3. If, at the end of the thirteen-month Letter of Intent period the
total purchases pursuant to the Letter are less than the intended purchase
amount specified in the Letter, the investor must remit to the Distributor
an amount equal to the difference between the dollar amount of sales
charges actually paid and the amount of sales charges which would have
been paid if the total amount purchased had been made at a single time.
Such sales charge adjustment will apply to any shares redeemed prior to
the completion of the Letter. If such difference in sales charges is not
paid within twenty days after a request from the Distributor or the
dealer, the Distributor will, within sixty days of the expiration of the
Letter, redeem the number of escrowed shares necessary to realize such
difference in sales charges. Full and fractional shares remaining after
such redemption will be released from escrow. If a request is received
to redeem escrowed shares prior to the payment of such additional sales
charge, the sales charge will be withheld from the redemption proceeds.
4. By signing the Letter, the investor irrevocably constitutes and
appoints the Transfer Agent as attorney-in-fact to surrender for
redemption any or all escrowed shares.
5. The shares eligible for purchase under the Letter (or the holding
of which may be counted toward completion of a Letter) include (a) Class
A shares sold with a front-end sales charge or subject to a Class A
contingent deferred sales charge, (b) Class B shares acquired subject to
a contingent deferred sales charge, and (c) Class A or B shares acquired
in exchange for either (i) Class A shares of one of the other
OppenheimerFunds that were acquired subject to a Class A initial or
contingent deferred sales charge or (ii) Class B shares of one of the
other OppenheimerFunds that were acquired subject to a contingent deferred
sales charge.
6. Shares held in escrow hereunder will automatically be exchanged for
shares of another fund to which an exchange is requested, as described in
the section of the Prospectus entitled "Exchange Privilege," and the
escrow will be transferred to that other fund.
Asset Builder Plans. To establish an Asset Builder Plan from a bank
account, a check (minimum $25) for the initial purchase must accompany the
application. Shares purchased by Asset Builder Plan payments from bank
accounts are subject to the redemption restrictions for recent purchases
described in "How To Sell Shares," in the Prospectus. Asset Builder Plans
also enable shareholders of Oppenheimer Cash Reserves to use those
accounts for monthly automatic purchases of shares of up to four other
Oppenheimer funds.
There is a front-end sales charge on the purchase of certain
Oppenheimer funds, or a contingent deferred sales charge may apply to
shares purchased by Asset Builder payments. An application should be
obtained from the Distributor, completed and returned, and a prospectus
of the selected fund(s) should be obtained from the Distributor or your
financial advisor before initiating Asset Builder payments. The amount
of the Asset Builder investment may be changed or the automatic
investments may be terminated at any time by writing to the Transfer
Agent. A reasonable period (approximately 15 days) is required after the
Transfer Agent's receipt of such instructions to implement them. The Fund
reserves the right to amend, suspend, or discontinue offering such plans
at any time without prior notice.
Cancellation of Purchase Orders. Cancellation of purchase orders for the
Fund's shares (for example, when a purchase check is returned to the Fund
unpaid) causes a loss to be incurred when the net asset value of the
Fund's shares on the cancellation date is less than on the purchase date.
That loss is equal to the amount of the decline in the net asset value per
share multiplied by the number of shares in the purchase order. The
investor is responsible for that loss. If the investor fails to
compensate the Fund for the loss, the Distributor will do so. The Fund
may reimburse the Distributor for that amount by redeeming shares from any
account registered in that investor's name, or the Fund or the Distributor
may seek other redress.
How to Sell Shares
Information on how to sell shares of the Fund is stated in the
Prospectus. The information below supplements the terms and conditions for
redemptions set forth in the Prospectus.
- Involuntary Redemptions. The Fund's Board of Trustees has the right
to cause the involuntary redemption of the shares held in any account if
the aggregate net asset value of those shares is less than $200 or such
lesser amount as the Board may fix. The Board of Trustees will not cause
the involuntary redemption of shares in an account if the aggregate net
asset value of the shares has fallen below the stated minimum solely as
a result of market fluctuations. Should the Board elect to exercise this
right, it may also fix, in accordance with the Investment Company Act, the
requirements for any notice to be given to the shareholders in question
(not less than 30 days), or the Board may set requirements for granting
permission to the Shareholder to increase the investment, and set other
terms and conditions so that the shares would not be involuntarily
redeemed.
- Payments "In Kind". The Prospectus states that payment for shares
tendered for redemption is ordinarily made in cash. However, the Board
of Trustees of the Fund may determine that it would be detrimental to the
best interests of the remaining shareholders of the Fund to make payment
of a redemption order wholly or partly in cash. In that case the Fund may
pay the redemption proceeds in whole or in part by a distribution "in
kind" of securities from the portfolio of the Fund, in lieu of cash, in
conformity with applicable rules of the Securities and Exchange
Commission. The Fund has elected to be governed by Rule 18f-1 under the
Investment Company Act, pursuant to which the Fund is obligated to redeem
shares solely in cash up to the lesser of $250,000 or 1% of the net assets
of the Fund during any 90-day period for any one shareholder. If shares
are redeemed in kind, the redeeming shareholder might incur brokerage or
other costs in selling the securities for cash. The method of valuing
securities used to make redemptions in kind will be the same as the method
the Fund uses to value its portfolio securities described above under the
"Determination of Net Asset Values Per Share" and that valuation will be
made as of the time the redemption price is determined.
Reinvestment Privilege. Within six months of a redemption, a
shareholder may reinvest all or part of the redemption proceeds of (i)
Class A shares, or (ii) Class B shares that were subject to the Class B
contingent deferred sales charge when redeemed. It does not apply to
Class C shares. The reinvestment may be made without sales charge only
in Class A shares of the Fund or any of the other Oppenheimer funds into
which shares of the Fund are exchangeable as described below, at the net
asset value next computed after the Transfer Agent receives the
reinvestment order. The shareholder must ask the Distributor for that
privilege at the time of reinvestment. Any capital gain that was realized
when the shares were redeemed is taxable, and reinvestment will not alter
any capital gains tax payable on that gain. If there has been a capital
loss on the redemption, some or all of the loss may not be tax deductible,
depending on the timing and amount of the reinvestment. Under the
Internal Revenue Code, if the redemption proceeds of Fund shares on which
a sales charge was paid are reinvested in shares of the Fund or another
of the Oppenheimer funds within 90 days of payment of the sales charge,
the shareholder's basis in the shares of the Fund that were redeemed may
not include the amount of the sales charge paid. That would reduce the
loss or increase the gain recognized from the redemption. However, in
that case the sales charge would be added to the basis of the shares
acquired by the reinvestment of the redemption proceeds. The Fund may
amend, suspend or cease offering this reinvestment privilege at any time
as to shares redeemed after the date of such amendment, suspension or
cessation.
Transfers of Shares. Shares are not subject to the payment of a
contingent deferred sales charge of either class at the time of transfer
to the name of another person or entity (whether the transfer occurs by
absolute assignment, gift or bequest, not involving, directly or
indirectly, a public sale). The transferred shares will remain subject
to the contingent deferred sales charge, calculated as if the transferee
shareholder had acquired the transferred shares in the same manner and at
the same time as the transferring shareholder. If less than all shares
held in an account are transferred, and some but not all shares in the
account would be subject to a contingent deferred sales charge if redeemed
at the time of transfer, the priorities described in the Prospectus under
"How to Buy Shares" for the imposition of the Class B and Class C
contingent deferred sales charges will be followed in determining the
order in which shares are transferred.
Distributions From Retirement Plans. Requests for distributions from
OppenheimerFunds-sponsored IRAs, 403(b)(7) custodial plans, 401(k) plans,
or pension or profit-sharing plans should be addressed to "Trustee,
OppenheimerFunds Retirement Plans," c/o the Transfer Agent at its address
listed in "How To Sell Shares" in the Prospectus or on the back cover of
this Statement of Additional Information. The request must: (i) state the
reason for the distribution; (ii) state the owner's awareness of tax
penalties if the distribution is premature; and (iii) conform to the
requirements of the plan and the Fund's other redemption requirements.
Participants (other than self-employed persons) in OppenheimerFunds-
sponsored pension or profit-sharing plans may not directly request
redemption of their accounts. The employer or plan administrator must
sign the request. Distributions from pension, profit sharing plans or
401(k) plans are subject to special requirements under the Internal
Revenue Code and certain documents (available from the Transfer Agent)
must be completed before the distribution may be made. Distributions from
retirement plans are subject to withholding requirements under the
Internal Revenue Code, and IRS Form W-4P (available from the Transfer
Agent) must be submitted to the Transfer Agent with the distribution
request, or the distribution may be delayed. Unless the shareholder has
provided the Transfer Agent with a certified tax identification number,
the Internal Revenue Code requires that tax be withheld from any
distribution even if the shareholder elects not to have tax withheld. The
Fund, the Manager, the Distributor, the Trustee and the Transfer Agent
assume no responsibility to determine whether a distribution satisfies the
conditions of applicable tax laws and will not be responsible for any tax
penalties assessed in connection with a distribution.
Special Arrangements for Repurchase of Shares from Dealers and Brokers.
The Distributor is the Fund's agent to repurchase its shares from
authorized dealers or brokers. The repurchase price per share will be the
net asset value next computed after the Distributor receives the order
placed by the dealer or broker, except that if the Distributor receives
a repurchase order from the dealer or broker after the close of The New
York Stock Exchange on a regular business day, it will be processed at
that day's net asset value, if the order was received by the dealer or
broker from its customer prior to the time the Exchange closes (normally,
that is 4:00 P.M., but may be earlier on some days) and the order was
transmitted to and received by the Distributor prior to its close of
business that day (normally 5:00 P.M.). Ordinarily, for accounts redeemed
by a broker-dealer under this procedure, payment will be made within three
business days after the shares have been redeemed upon the Distributor's
receipt of the required redemption documents in proper form, with the
signature(s) of the registered owners guaranteed on the redemption
document as described in the Prospectus.
Automatic Withdrawal and Exchange Plans. Investors owning shares of the
Fund valued at $5,000 or more can authorize the Transfer Agent to redeem
shares (minimum $50) automatically on a monthly, quarterly, semi-annual
or annual basis under an Automatic Withdrawal Plan. Shares will be
redeemed three business days prior to the date requested by the
shareholder for receipt of the payment. Automatic withdrawals of up to
$1,500 per month may be requested by telephone if payments are to be made
by check payable to all shareholders of record and sent to the address of
record for the account (and if the address has not been changed within the
prior 30 days). Required minimum distributions from OppenheimerFunds-
sponsored retirement plans may not be arranged on this basis. Payments
are normally made by check, but shareholders having AccountLink privileges
(see "How To Buy Shares") may arrange to have Automatic Withdrawal Plan
payments transferred to the bank account designated on the
OppenheimerFunds New Account Application or signature-guaranteed
instructions. The Fund cannot guarantee receipt of a payment on the date
requested and reserves the right to amend, suspend or discontinue offering
such plans at any time without prior notice. Because of the sales charge
assessed on Class A share purchases, shareholders should not make regular
additional Class A share purchases while participating in an Automatic
Withdrawal Plan. Class B and Class C shareholders should not establish
withdrawal plans because of the imposition of the contingent deferred
sales charges on such withdrawals (except where the Class B and Class C
contingent deferred sales charges are waived as described in the
Prospectus under "Waivers of Class B and Class C Contingent Deferred Sales
Charges").
By requesting an Automatic Withdrawal or Exchange Plan, the shareholder
agrees to the terms and conditions applicable to such plans, as stated
below and in the provisions of the OppenheimerFunds Application relating
to such Plans, as well as the Prospectus. These provisions may be amended
from time to time by the Fund and/or the Distributor. When adopted, such
amendments will automatically apply to existing Plans.
- Automatic Exchange Plans. Shareholders can authorize the Transfer
Agent (on the OppenheimerFunds Application or signature-guaranteed
instructions) to exchange a pre-determined amount of shares of the Fund
for shares (of the same class) of other Oppenheimer funds automatically
on a monthly, quarterly, semi-annual or annual basis under an Automatic
Exchange Plan. The minimum amount that may be exchanged to each other
fund account is $25. Exchanges made under these plans are subject to the
restrictions that apply to exchanges as set forth in "How to Exchange
Shares" in the Prospectus and below in this Statement of Additional
Information.
- Automatic Withdrawal Plans. Fund shares will be redeemed as
necessary to meet withdrawal payments. Shares acquired without a sales
charge will be redeemed first and shares acquired with reinvested
dividends and capital gains distributions will be redeemed next, followed
by shares acquired with a sales charge, to the extent necessary to make
withdrawal payments. Depending upon the amount withdrawn, the investor's
principal may be depleted. Payments made under withdrawal plans should
not be considered as a yield or income on your investment. It may not be
desirable to purchase additional Class A shares while making automatic
withdrawals because of the sales charges that apply to purchases when
made. Accordingly, a shareholder normally may not maintain an Automatic
Withdrawal Plan while simultaneously making regular purchases of Class A
shares.
The Transfer Agent will administer the investor's Automatic Withdrawal
Plan (the "Plan") as agent for the investor (the "Planholder") who
executed the Plan authorization and application submitted to the Transfer
Agent. The Transfer Agent shall incur no liability to the Planholder for
any action taken or omitted by the Transfer Agent in good faith to
administer the Plan. Certificates will not be issued for shares of the
Fund purchased for and held under the Plan, but the Transfer Agent will
credit all such shares to the account of the Planholder on the records of
the Fund. Any share certificates held by a Planholder may be surrendered
unendorsed to the Transfer Agent with the Plan application so that the
shares represented by the certificate may be held under the Plan.
For accounts subject to Automatic Withdrawal Plans, distributions of
capital gains must be reinvested in shares of the Fund, which will be done
at net asset value without a sales charge. Dividends on shares held in
the account may be paid in cash or reinvested.
Redemptions of shares needed to make withdrawal payments will be made
at the net asset value per share determined on the redemption date.
Checks or ACH transfer payments of the proceeds of Plan withdrawals will
normally be transmitted three business days prior to the date selected for
receipt of the payment (receipt of payment on the date selected cannot be
guaranteed), according to the choice specified in writing by the
Planholder.
The amount and the interval of disbursement payments and the address
to which checks are to be mailed or AccountLink payments are to be sent
may be changed at any time by the Planholder by writing to the Transfer
Agent. The Planholder should allow at least two weeks' time in mailing
such notification for the requested change to be put in effect. The
Planholder may, at any time, instruct the Transfer Agent by written notice
(in proper form in accordance with the requirements of the then-current
Prospectus of the Fund) to redeem all, or any part of, the shares held
under the Plan. In that case, the Transfer Agent will redeem the number
of shares requested at the net asset value per share in effect in
accordance with the Fund's usual redemption procedures and will mail a
check for the proceeds to the Planholder.
The Plan may be terminated at any time by the Planholder by writing to
the Transfer Agent. A Plan may also be terminated at any time by the
Transfer Agent upon receiving directions to that effect from the Fund.
The Transfer Agent will also terminate a Plan upon receipt of evidence
satisfactory to it of the death or legal incapacity of the Planholder.
Upon termination of a Plan by the Transfer Agent or the Fund, shares that
have not been redeemed from the account will be held in uncertificated
form in the name of the Planholder, and the account will continue as a
dividend-reinvestment, uncertificated account unless and until proper
instructions are received from the Planholder or his or her executor or
guardian, or other authorized person.
To use shares held under the Plan as collateral for a debt, the
Planholder may request issuance of a portion of the Class A shares in
certificated form. Upon written request from the Planholder, the Transfer
Agent will determine the number of shares for which a certificate may be
issued without causing the withdrawal checks to stop because of exhaustion
of uncertificated shares needed to continue payments. However, should
such uncertificated shares become exhausted, Plan withdrawals will
terminate.
If the Transfer Agent ceases to act as transfer agent for the Fund, the
Planholder will be deemed to have appointed any successor transfer agent
to act as agent in administering the Plan.
How To Exchange Shares
As stated in the Prospectus, shares of a particular class of
Oppenheimer funds having more than one class of shares may be exchanged
only for shares of the same class of other Oppenheimer funds. Shares of
the Oppenheimer funds that have a single class without a class designation
are deemed "Class A" shares for this purpose. All Oppenheimer funds offer
Class A shares, but certain other Oppenheimer funds do not presently offer
Class B and/or Class C shares. A list showing which funds offer which
classes can be obtained by calling the Distributor at 1-800-525-7048.
Class A shares of Oppenheimer funds may be exchanged at net asset value
for shares of any Money Market Fund. Shares of any Money Market Fund
purchased without a sales charge may be exchanged for shares of
Oppenheimer funds offered with a sales charge upon payment of the sales
charge (or, if applicable, may be used to purchase shares of Oppenheimer
funds subject to a contingent deferred sales charge). However, shares of
Oppenheimer Money Market Fund, Inc. purchased with the redemption proceeds
of shares of other mutual funds (other than funds managed by the Manager
or its subsidiaries) redeemed within the 12 months prior to that purchase
may subsequently be exchanged for shares of other Oppenheimer funds
without being subject to an initial or contingent deferred sales charge,
whichever is applicable. To qualify for that privilege, the investor or
the investor's dealer must notify the Distributor of eligibility for this
privilege at the time the shares of Oppenheimer Money Market Fund, Inc.
are purchased, and, if requested, must supply proof of entitlement to this
privilege. Shares of this Fund acquired by reinvestment of dividends or
distributions from any other of the Oppenheimer funds or from any unit
investment trust for which reinvestment arrangements have been made with
the Distributor may be exchanged at net asset value for shares of any of
the Oppenheimer funds. No contingent deferred sales charge is imposed on
exchanges of shares of either class purchased subject to a contingent
deferred sales charge. However, when Class A shares acquired by exchange
of Class A shares of other Oppenheimer funds purchased subject to a Class
A contingent deferred sales charge are redeemed within 18 months of the
end of the calendar month of the initial purchase of the exchanged Class
A shares, the Class A contingent deferred sales charge is imposed on the
redeemed shares (see "Class A Contingent Deferred Sales Charge" in the
Prospectus). The Class B contingent deferred sales charge is imposed on
Class B shares acquired by exchange if they are redeemed within 6 years
of the initial purchase of the exchanged Class B shares. The Class C
contingent deferred sales charge is imposed on Class C shares acquired by
exchange if they are redeemed within 12 months of the initial purchase of
the exchanged Class C shares.
When Class B or Class C shares are redeemed to effect an exchange, the
priorities described in "How To Buy Shares" in the Prospectus for the
imposition of the Class B and Class C contingent deferred sales charge
will be followed in determining the order in which the shares are
exchanged. Shareholders should take into account the effect of any
exchange on the applicability and rate of any contingent deferred sales
charge that might be imposed in the subsequent redemption of remaining
shares. Shareholders owning shares of more than one class must specify
whether they intend to exchange Class A, Class B or Class C shares.
The Fund reserves the right to reject telephone or written exchange
requests submitted in bulk by anyone on behalf of 10 or more accounts. The
Fund may accept requests for exchanges of up to 50 accounts per day from
representatives of authorized dealers that qualify for this privilege. In
connection with any exchange request, the number of shares exchanged may
be less than the number requested if the exchange or the number requested
would include shares subject to a restriction cited in the Prospectus or
this Statement of Additional Information or would include shares covered
by a share certificate that is not tendered with the request. In those
cases, only the shares available for exchange without restriction will be
exchanged.
When exchanging shares by telephone, a shareholder must either have an
existing account in, or obtain and acknowledge receipt of a prospectus of,
the fund to which the exchange is to be made. For full or partial
exchanges of an account made by telephone, any special account features
such as Asset Builder Plans, Automatic Withdrawal Plans and retirement
plan contributions will be switched to the new account unless the Transfer
Agent is instructed otherwise. If all telephone lines are busy (which
might occur, for example, during periods of substantial market
fluctuations), shareholders might not be able to request exchanges by
telephone and would have to submit written exchange requests.
Shares to be exchanged are redeemed on the regular business day the
Transfer Agent receives an exchange request in proper form (the
"Redemption Date"). Normally, shares of the fund to be acquired are
purchased on the Redemption Date, but such purchases may be delayed by
either fund up to five business days if it determines that it would be
disadvantaged by an immediate transfer of the redemption proceeds. The
Fund reserves the right, in its discretion, to refuse any exchange request
that may disadvantage it (for example, if the receipt of multiple exchange
requests from a dealer might require the disposition of portfolio
securities at a time or at a price that might be disadvantageous to the
Fund).
The different Oppenheimer funds available for exchange have different
investment objectives, policies and risks, and a shareholder should assure
that the Fund selected is appropriate for his or her investment and should
be aware of the tax consequences of an exchange. For federal income tax
purposes, an exchange transaction is treated as a redemption of shares of
one fund and a purchase of shares of another. "Reinvestment Privilege,"
above, discusses some of the tax consequences of reinvestment of
redemption proceeds in such cases. The Fund, the Distributor, and the
Transfer Agent are unable to provide investment, tax or legal advice to
a shareholder in connection with an exchange request or any other
investment transaction.
Dividends, Capital Gains and Taxes
Tax Status of the Fund's Dividends and Distributions. The Federal tax
treatment of the Fund's dividends and capital gains distributions is
explained in the Prospectus under the caption "Dividends, Capital Gains
and Taxes." Special provisions of the Internal Revenue Code govern the
eligibility of the Fund's dividends for the dividends-received deduction
for corporate shareholders. Long-term capital gains distributions are not
eligible for the deduction. In addition, the amount of dividends paid by
the Fund which may qualify for the deduction is limited to the aggregate
amount of qualifying dividends that the Fund derives from its portfolio
investments that the Fund has held for a minimum period, usually 46 days.
A corporate shareholder will not be eligible for the deduction on
dividends paid on Fund shares held for 45 days or less. To the extent the
Fund's dividends are derived from gross income from option premiums,
interest income or short-term gains from the sale of securities or
dividends from foreign corporations, those dividends will not qualify for
the deduction.
Under the Internal Revenue Code, by December 31 each year, the Fund
must distribute 98% of its taxable investment income earned from January
1 through December 31 of that year and 98% of its capital gains realized
in the period from November 1 of the prior year through October 31 of the
current year, or else the Fund must pay an excise tax on the amounts not
distributed. While it is presently anticipated that the Fund will meet
those requirements, the Fund's Board of Trustees and the Manager might
determine in a particular year that it would be in the best interest of
shareholders for the Fund not to make such distributions at the required
levels and to pay the excise tax on the undistributed amounts. That would
reduce the amount of income or capital gains available for distribution
to shareholders.
If the Fund has more than 50% of its total assets invested in foreign
securities at the end of its fiscal year, it may elect the application of
Section 853 of the Internal Revenue Code to permit shareholders to take
a credit (or, at their option, a deduction) for foreign taxes paid by the
Fund. Under Section 853, shareholders would be entitled to treat the
foreign taxes withheld from interest and dividends paid to the Fund from
its foreign investments as a credit on their federal income taxes. As an
alternative, shareholders could, if to their advantage, treat the foreign
tax withheld as a deduction from gross income in computing taxable income
rather than as a tax credit. In substance, the Fund's election would
enable shareholders to benefit from the same foreign tax credit or
deduction that would be received if they had been the record owners of the
Fund's foreign securities and had paid foreign taxes on the income
received.
If the Fund qualifies as a "regulated investment company" under the
Internal Revenue Code, it will not be liable for Federal income taxes on
amounts paid by it as dividends and distribution. The Fund qualified
during its last fiscal year, and intends to qualify in current and future
years, but reserves the right not to do so. The Internal Revenue Code
contains a number of complex tests relating to such qualification in which
the Fund derives 30% or more of its gross income from the sale of
securities held less than three months, it may fail to qualify (see "Tax
Aspects of Covered Calls and Hedging Instruments," above). If it did not
so qualify, the Fund would be treated for tax purposes as an ordinary
corporation and receive no tax deduction for payments made to
shareholders.
The amount of a class's distributions may vary from time to time
depending on market conditions, the composition of the Fund's portfolio,
and expenses borne by the Fund or borne separately by a class, as
described in "Alternative Sales Arrangements -- Class A, Class B and Class
C Shares," above. Dividends are calculated in the same manner, at the
same time and on the same day for shares of each class. However,
dividends on Class B and Class C shares are expected to be lower as a
result of the asset-based sales charge on Class B and Class C shares, and
Class B and Class C dividends will also differ in amount as a consequence
of any difference in net asset value between the classes.
Dividends, distributions and the proceeds of the redemption of Fund
shares represented by checks returned to the Transfer Agent by the Postal
Service as undeliverable will be invested in shares of Oppenheimer Money
Market Fund, Inc., as promptly as possible after the return of such checks
to the Transfer Agent, to enable the investor to earn a return on
otherwise idle funds.
Dividend Reinvestment in Another Fund. Shareholders of the Fund may elect
to reinvest all dividends and/or capital gains distributions in shares of
the same class of any of the other Oppenheimer funds listed in "Reduced
Sales Charges," above, at net asset value without sales charge. Class B
and Class C shareholders should be aware that as of the date of this
Statement of Additional Information, not all of the Oppenheimer funds
offer Class B and Class C shares. To elect this option, a shareholder
must notify the Transfer Agent in writing and either have an existing
account in the fund selected for reinvestment or must obtain a prospectus
for that fund and an application from the Distributor to establish an
account. The investment will be made at the net asset value per share in
effect at the close of business on the payable date of the dividend or
distribution. Dividends and/or distributions from shares of other
Oppenheimer funds may be invested in shares of this Fund on the same
basis.
Additional Information About the Fund
The Custodian. The Bank of New York is the Custodian of the Fund's
assets. The Custodian's responsibilities include safeguarding and
controlling the Fund's portfolio securities, collecting income on the
portfolio securities and handling the delivery of such securities to and
from the Fund. The Manager has represented to the Fund that the banking
relationships between the Manager and the Custodian have been and will
continue to be unrelated to and unaffected by the relationship between the
Fund and the Custodian. It will be the practice of the Fund to deal with
the Custodian in a manner uninfluenced by any banking relationship the
Custodian may have with the Manager and its affiliates. The Fund's cash
balances in excess of $100,000 are not protected by Federal deposit
insurance. Such uninsured balances may at times be substantial.
Independent Auditors. The independent auditors of the Fund audit the
Fund's financial statements and perform other related audit services.
They also act as auditors for certain other funds advised by the Manager
and its affiliates.
<PAGE>
----------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Board of Trustees and Shareholders of Oppenheimer
Global Growth & Income Fund:
We have audited the accompanying statements of investments
and assets and liabilities of Oppenheimer Global Growth &
Income Fund as of September 30, 1994, and the related
statement of operations for the year then ended, the
statements of changes in net assets for each of the years
in the two-year period then ended and the financial
highlights for each of the years in the three-year period
then ended and the period from October 22, 1990
(commencement of operations) to September 30, 1991. 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 and financial highlights. Our
procedures included confirmation of securities owned as of
September 30, 1994, by correspondence with the custodian
and brokers; and where confirmations were not received
from brokers, we performed other auditing procedures. An
audit also includes assessing the accounting principles
used and significant estimates made by management, as well
as evaluating the overall financial statement
presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and
financial highlights referred to above present fairly, in
all material respects, the financial position of
Oppenheimer Global Growth & Income Fund as of September
30, 1994, the results of its operations for the year then
ended, the changes in its net assets for each of the years
in the two-year period then ended, and the financial
highlights for each of the years in the three-year period
then ended and the period from October 22, 1990
(commencement of operations) to September 30, 1991, in
conformity with generally accepted accounting principles.
KPMG PEAT MARWICK LLP
Denver, Colorado
October 21, 1994
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS September 30, 1994
FACE MARKET VALUE
AMOUNT SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENTS--0.6%
Repurchase agreement with First Chicago Capital Markets, 4.95%,
dated 9/30/94, to be repurchased at $800,330 on 10/3/94,
collateralized by U.S. Treasury Nts., 4.25%--8.50%, 4/15/95-
7/15/98, with a value of $452,373 and U.S. Treasury Bills,
0%, 3/16/95--3/23/95, with a value of $364,369 (Cost $800,000) $ 800,000 $ 800,000
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
GOVERNMENT OBLIGATIONS--17.4%
- ----------------------------------------------------------------------------------------------------------------------------------
Argentina (Republic of) Bonds, Bonos de Consolidacion de
Deudas, Series I, 4.375%, 4/1/01(1)(7) 1,723,903 1,306,567
-----------------------------------------------------------------------------------------------
Banco Nacional de Comercio Exterior SNC International Finance
BV Gtd. Matador Bonds, 8%, 8/5/03(2) 2,000,000 1,745,000
-----------------------------------------------------------------------------------------------
Brazil (Federal Republic of) Bonds, Banco Do Nordeste Brasil,
10.375%, 11/6/95(2) 1,000,000 1,003,750
-----------------------------------------------------------------------------------------------
Canada (Government of) Bonds, 9.25%, 10/1/96 1,300,000(3) 1,001,063
-----------------------------------------------------------------------------------------------
German Bund (Federal Republic of) Nts., 6.125%, 7/21/97 2,300,000(3) 1,469,784
-----------------------------------------------------------------------------------------------
Government National Mortgage Assn., 7.50%, 9/15/22 1,635,664 1,544,296
-----------------------------------------------------------------------------------------------
Italy (Republic of):
Treasury Bonds, 11.50%, 5/1/98 2,000,000,000(3) 1,284,615
Treasury Bonds, Buoni Poliennali del Tes, 12.50%, 6/16/97 1,500,000,000(3) 984,711
-----------------------------------------------------------------------------------------------
Mexican Tesobonos, 0%, 1/12/95 2,500,000 2,450,447
-----------------------------------------------------------------------------------------------
New Zealand (Government of) Bond, 9%, 11/15/96 1,500,000(3) 906,134
-----------------------------------------------------------------------------------------------
Polish People's Republic Loan Participation
Agreement, 5.875%, 2/3/24(2)(8) 2,000,000(3) 788,327
-----------------------------------------------------------------------------------------------
Spain (Kingdom of):
Bonds, 11.45%, 8/30/98 190,000,000(3) 1,496,208
Bonos y Obligacion del Estado Gtd. Bonds, 9%, 2/28/97 50,000,000(3) 376,823
-----------------------------------------------------------------------------------------------
Sweden (Kingdom of) Bonds, 11%, 1/21/99 7,000,000(3) 948,638
-----------------------------------------------------------------------------------------------
Treasury Corp. of Victoria Gtd. Bonds, 12%, 10/22/98 1,200,000(3) 953,704
-----------------------------------------------------------------------------------------------
United Kingdom Treasury Nts., 9.50%, 1/15/99 600,000(3) 971,334
-----------------------------------------------------------------------------------------------
U.S. Treasury Bonds, 7.625%, 11/15/22 4,410,000 4,252,894
-----------------------------------------------------------------------------------------------
U.S. Treasury Nts., 8.50%, 7/15/97 1,000,000 1,041,562
------------
Total Government Obligations (Cost $25,666,794) 24,525,857
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES--13.7%
- ----------------------------------------------------------------------------------------------------------------------------------
Amstar Corp., 11.375% Sr. Sub. Nts., 2/15/97 400,000 396,000
-----------------------------------------------------------------------------------------------
Auburn Hills Trust, 12.375% Gtd. Exch. Ctfs., 5/1/20(7) 300,000 397,241
-----------------------------------------------------------------------------------------------
Banco De Galicia, 7%, 8/1/02 600,000 636,000
-----------------------------------------------------------------------------------------------
Banco Nacional de Mexico SA, 7% Exch. Sub. Debs., 12/15/99(2) 300,000 348,375
-----------------------------------------------------------------------------------------------
Beaver Valley Funding Corp., 9% Debs., 6/1/17 500,000 380,408
-----------------------------------------------------------------------------------------------
Carbide/Graphite Group, Inc., 11.50% Sr. Nts., 9/1/03 350,000 357,875
-----------------------------------------------------------------------------------------------
Card Establishment Services, Inc., 10% Sr. Sub. Nts.,
Series B, 10/1/03 500,000 472,500
-----------------------------------------------------------------------------------------------
Carlton Communications PLC, 7.50% Cv. Bonds, 8/14/07 170,000(3) 351,198
-----------------------------------------------------------------------------------------------
Celcaribe SA, 0%/13.50% Sr. Sec. Nts., 3/15/04(2)(6) 1,750,000 1,109,059
-----------------------------------------------------------------------------------------------
Charoen Pokphand Indonesia, 12.875% Cv. Bonds, 3/23/98 238,100,000(3) 109,418
-----------------------------------------------------------------------------------------------
Charter Medical Corp., 11.25% Sr. Sub. Nts., 4/15/04(2) 500,000 517,500
-----------------------------------------------------------------------------------------------
Cole National Group, Inc., 11.25% Sr. Nts., 10/1/01 500,000 492,500
-----------------------------------------------------------------------------------------------
Computervision Corp., 10.875% Sr. Nts., 8/15/97 300,000 279,750
</TABLE>
4 Oppenheimer Global Growth & Income Fund
<PAGE>
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CORPORATE BONDS AND NOTES Dr. Pepper/Seven-Up Cos., Inc., 0%/11.50% Sr. Sub.
(CONTINUED) Disc. Nts., 11/1/02(6) $ 556,000 $ 444,800
-----------------------------------------------------------------------------------------------
Envirotest Systems Corp., 9.625% Sr. Sub. Nts., 4/1/03 250,000 230,000
-----------------------------------------------------------------------------------------------
Family Restaurant, Inc., 9.75% Sr. Nts., 2/1/02 500,000 440,000
-----------------------------------------------------------------------------------------------
First PV Funding Corp., 10.15% Lease Obligation Bonds, 1/15/16 500,000 459,823
-----------------------------------------------------------------------------------------------
GPA Delaware, Inc., 8.75% Gtd. Nts., 12/15/98 500,000 420,000
-----------------------------------------------------------------------------------------------
GPA Holland BV, 9.75% Med.-Term Nts., Series B, 6/10/96 500,000 477,500
-----------------------------------------------------------------------------------------------
Grand Union Co., 11.25% Sr. Nts., 7/15/00 300,000 272,250
-----------------------------------------------------------------------------------------------
Gulf Canada Resources Ltd., 9.25% Sr. Sub. Debs., 1/15/04 500,000 460,375
-----------------------------------------------------------------------------------------------
Industrial Credit and Investment Corp. India Ltd.,
2.50% Cv. Debs., 4/30/00(2) 450,000 399,375
-----------------------------------------------------------------------------------------------
Infinity Broadcasting Corp., 10.375% Sr. Sub. Nts., 3/15/02 300,000 312,000
-----------------------------------------------------------------------------------------------
International Container Terminal Services, Inc.:
5% Cv. Sr. Nts., 9/15/01 300,000 281,250
6% Cv. Sr. Nts., 2/19/00(2) 300,000 420,000
-----------------------------------------------------------------------------------------------
Jindal Strips Ltd., 4.25% Cv. Debs., 3/31/99(2) 400,000 538,000
-----------------------------------------------------------------------------------------------
Kinnevik Industrifoerval, 10.50% Cv. Bonds, 7/21/97 5,000,000(3) 1,310,145
-----------------------------------------------------------------------------------------------
Mesa Capital Corp., 0%/12.75% Sec. Disc. Nts., 6/30/98(6) 390,000 346,125
-----------------------------------------------------------------------------------------------
Nextel Communications, Inc., 0%/9.75% Sr. Disc. Nts., 8/15/04(6) 525,000 259,875
-----------------------------------------------------------------------------------------------
OPI International, Inc., 12.875% Gtd. Sr. Nts., 7/15/02 500,000 571,250
-----------------------------------------------------------------------------------------------
Panamsat LP/Panamsat Capital Corp., 0%/11.375% Sr. Sub. Disc.
Nts., 8/1/03(6) 1,000,000 672,500
-----------------------------------------------------------------------------------------------
Penda Corp., 10.75% Sr. Nts., Series B, 3/1/04 500,000 462,500
-----------------------------------------------------------------------------------------------
Piv Investment Financial Cayman Ltd., 4.50% Cv. Gtd. Bonds,
12/1/00(2) 500,000 407,500
-----------------------------------------------------------------------------------------------
PT Inti Indorayon Utama, 9.125% Sr. Nts., 10/15/00 225,000 196,875
-----------------------------------------------------------------------------------------------
Shangri-La Asia Ltd., 2.875% Cv.Sub.Debs., 6/6/00(2) 500,000 427,500
-----------------------------------------------------------------------------------------------
Southland Corp., 4.50% 2nd Priority Sr. Sub. Debs., Series A,
6/15/04 700,000 437,500
-----------------------------------------------------------------------------------------------
Stone Consolidated Corp., 10.25% Sr. Sec. Nts., 12/15/00 300,000 296,250
-----------------------------------------------------------------------------------------------
Subic Power Corp., 9.50% Sr. Sec. Nts., Series A, 12/28/08(2) 650,000 599,625
-----------------------------------------------------------------------------------------------
Swift Energy Co., 6.50% Cv. Sub. Debs., 6/30/03 300,000 309,000
-----------------------------------------------------------------------------------------------
Synthetic Industries, Inc., 12.75% Sr. Sub. Debs., 12/1/02 300,000 303,000
-----------------------------------------------------------------------------------------------
Thermo Electron Corp., 4.625% Cv. Sr. Debs., 8/1/97(2) 750,000 1,078,125
-----------------------------------------------------------------------------------------------
Thrifty Payless, Inc., 11.75% Sr. Nts., 4/15/03 250,000 249,375
-----------------------------------------------------------------------------------------------
USA Mobile Communications, Inc. II, 9.50% Sr. Nts., 2/1/04 500,000 450,000
------------
Total Corporate Bonds and Notes (Cost $19,273,752) 19,380,342
SHARES
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS--62.5%
- ----------------------------------------------------------------------------------------------------------------------------------
BASIC MATERIALS--6.6%
- ----------------------------------------------------------------------------------------------------------------------------------
CHEMICALS--2.7% Minerals Technologies, Inc. 30,000 888,750
-----------------------------------------------------------------------------------------------
Mitsubishi Petrochemical Co. Ltd. 120,000 840,254
-----------------------------------------------------------------------------------------------
NOVA Corp. 80,000 880,000
-----------------------------------------------------------------------------------------------
PT Tri Polyta Indonesia ADR(4) 25,000 678,125
-----------------------------------------------------------------------------------------------
Tianjin Bohai Chemical Industry Co.(4) 2,500,000 454,563
------------
3,741,692
</TABLE>
5 Oppenheimer Global Growth & Income Fund
<PAGE>
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PAPER AND Corticeira Amorim, SA 7,000 $ 118,584
FOREST PRODUCTS--1.3% -----------------------------------------------------------------------------------------------
Hansol Paper Ltd., Sponsored GDR(2)(4) 10,463 458,501
-----------------------------------------------------------------------------------------------
Indah Kiat 560,000 733,439
-----------------------------------------------------------------------------------------------
Stora Kopparbergs Bergslags AB 8,400 482,882
------------
1,793,406
- ----------------------------------------------------------------------------------------------------------------------------------
STEEL--2.6% China Steel Corp., GDR(4) 21,000 435,750
-----------------------------------------------------------------------------------------------
Dofasco, Inc. 32,100 559,392
-----------------------------------------------------------------------------------------------
Kangwon Industrial Co. Ltd. 34,000 740,704
-----------------------------------------------------------------------------------------------
Pohang Iron & Steel Co. Ltd. 7,000 1,028,703
-----------------------------------------------------------------------------------------------
Tung Ho Steel Enterprise Corp., GDR(2) 25,000 425,000
-----------------------------------------------------------------------------------------------
Ugine SA 7,000 537,333
------------
3,726,882
- ----------------------------------------------------------------------------------------------------------------------------------
CONSUMER CYCLICALS--9.2%
- ----------------------------------------------------------------------------------------------------------------------------------
AIRLINES--0.2% Vienna International Airport 6,500 276,228
- ----------------------------------------------------------------------------------------------------------------------------------
AUTOMOBILES--2.9% CIADEA SA 29,999 436,468
-----------------------------------------------------------------------------------------------
Fiat SpA di Risp. 300,000 725,961
-----------------------------------------------------------------------------------------------
Nissan Motor Co. 50,000 408,709
-----------------------------------------------------------------------------------------------
Volkswagen AG 3,000 822,724
-----------------------------------------------------------------------------------------------
Volvo AB, Series B Free 92,500 1,687,981
------------
4,081,843
- ----------------------------------------------------------------------------------------------------------------------------------
BROADCAST MEDIA--2.3% Comcast Corp., Cl. A Special(4) 30,000 459,375
-----------------------------------------------------------------------------------------------
Grupo Televisa SA, Sponsored ADR(2) 10,000 578,750
-----------------------------------------------------------------------------------------------
Scandinavian Broadcasting System SA(4) 20,000 525,000
-----------------------------------------------------------------------------------------------
TeleCommunications, Inc., Cl. A(4) 24,000 532,500
-----------------------------------------------------------------------------------------------
Television Broadcast 100,000 464,592
-----------------------------------------------------------------------------------------------
United International Holdings, Inc., Cl. A(4) 42,000 637,875
------------
3,198,092
- ----------------------------------------------------------------------------------------------------------------------------------
ENTERTAINMENT--0.1% Euro Disney(4) 130,000 196,438
- ----------------------------------------------------------------------------------------------------------------------------------
HOUSEHOLD FURNISHINGS Philips Gloeilamp NV 80,000 2,444,480
AND APPLIANCES--2.2% -----------------------------------------------------------------------------------------------
Sony Corp. 10,800 628,554
------------
3,073,034
- ----------------------------------------------------------------------------------------------------------------------------------
RETAIL: SPECIALTY--1.1% Benetton SpA 30,000 403,846
-----------------------------------------------------------------------------------------------
Grupo Casa Autrey, SA de C.V. 15,000 489,375
-----------------------------------------------------------------------------------------------
Toys 'R' Us, Inc.(4) 20,000 712,500
------------
1,605,721
- ----------------------------------------------------------------------------------------------------------------------------------
RETAIL STORES: GENERAL Rinascente SpA, Ordinary 63,000 370,933
MERCHANDISE CHAINS--0.4% -----------------------------------------------------------------------------------------------
Sonae Industria E. Investimentos(4) 11,000 243,641
------------
614,574
</TABLE>
6 Oppenheimer Global Growth & Income Fund
<PAGE>
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CONSUMER NON-CYCLICALS--6.1%
- ----------------------------------------------------------------------------------------------------------------------------------
AGRICULTURAL BIOTECHNOLOGY--0.9% Plant Genetics Systems International NV(2)(4) 50,072
$ 466,958
-----------------------------------------------------------------------------------------------
Sumitomo Chemical Co. Ltd. 150,000 850,257
------------
1,317,215
- ----------------------------------------------------------------------------------------------------------------------------------
BEVERAGES: ALCOHOLIC--0.6% LVMH Moet Hennessy Louis Vuitton 5,000
823,528
- ----------------------------------------------------------------------------------------------------------------------------------
DRUGS--1.5% Astra AB Free, Series A 30,000 719,911
-----------------------------------------------------------------------------------------------
Pharmavit(4) 16,000 240,000
-----------------------------------------------------------------------------------------------
Schering AG 1,500 922,301
-----------------------------------------------------------------------------------------------
Takeda Chemical Industries Ltd. 20,000 234,414
------------
2,116,626
- ----------------------------------------------------------------------------------------------------------------------------------
FOOD PROCESSING--0.5% Mavesa ADR(2) 75,000 494,475
-----------------------------------------------------------------------------------------------
Molinos Rio de la Plata SA(4) 14,600 139,421
------------
633,896
- ----------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE: MISCELLANEOUS--1.7% Amgen, Inc.(4) 14,300
761,475
-----------------------------------------------------------------------------------------------
Chiron Corp. 9,400 625,100
-----------------------------------------------------------------------------------------------
Genzyme Corp.(4) 30,843 1,056,373
------------
2,442,948
- ----------------------------------------------------------------------------------------------------------------------------------
HOSPITAL MANAGEMENT--0.3% Community Psychiatric Centers 35,000
476,875
- ----------------------------------------------------------------------------------------------------------------------------------
MEDICAL PRODUCTS--0.6% Arjo AB(4) 30,100 523,122
-----------------------------------------------------------------------------------------------
Circon Corp.(4) 2,500 30,000
-----------------------------------------------------------------------------------------------
Stryker Corp. 7,100 246,725
------------
799,847
- ----------------------------------------------------------------------------------------------------------------------------------
ENERGY--4.3%
- ----------------------------------------------------------------------------------------------------------------------------------
OIL: INTEGRATED British Petroleum Co. PLC 8,000 606,000
INTERNATIONAL--2.8% -----------------------------------------------------------------------------------------------
Compagnie Francaise de Petroleum Total 8,000 470,242
-----------------------------------------------------------------------------------------------
OeMV AG(4) 9,000 811,099
-----------------------------------------------------------------------------------------------
Repsol SA 16,000 487,808
-----------------------------------------------------------------------------------------------
YPF Sociedad Anonima, Sponsored ADR 39,200 989,800
-----------------------------------------------------------------------------------------------
YuKong Ltd. 10,364 522,936
------------
3,887,885
- ----------------------------------------------------------------------------------------------------------------------------------
OIL AND GAS DRILLING--0.8% Petroleum Geo-Services AS(4) 60,000
1,175,623
- ----------------------------------------------------------------------------------------------------------------------------------
OIL WELL SERVICES McDermott International, Inc. 10,000 257,500
AND EQUIPMENT--0.7% -----------------------------------------------------------------------------------------------
TH Loy Industries Berhad(4) 172,500 699,624
------------
957,124
</TABLE>
7 Oppenheimer Global Growth & Income Fund
<PAGE>
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FINANCIAL--5.9%
- ----------------------------------------------------------------------------------------------------------------------------------
FINANCIAL SERVICES: American Express Co. 20,000 $ 607,500
MISCELLANEOUS--1.2% -----------------------------------------------------------------------------------------------
Industrial Finance Corporation of Thailand (The ) 230,000 570,971
-----------------------------------------------------------------------------------------------
Ssangyong Investment & Securities Co. Ltd. 22,662 513,563
------------
1,692,034
- ----------------------------------------------------------------------------------------------------------------------------------
INSURANCE: MULTI-LINE--1.3% American International Group, Inc. 9,000
799,875
-----------------------------------------------------------------------------------------------
National Mutual Asia, Ltd. 1,000,000 647,065
-----------------------------------------------------------------------------------------------
Reinsurance Australia Corp.(4) 350,000 458,426
------------
1,905,366
- ----------------------------------------------------------------------------------------------------------------------------------
MAJOR BANKS: OTHER--2.5% Banco LatinoAmericano de Exportaciones SA, Cl. E 10,000
320,000
-----------------------------------------------------------------------------------------------
Banco Portugues de Investimento 7,000 109,734
-----------------------------------------------------------------------------------------------
Banco Wiese, Sponsored ADR(4) 7,500 181,875
-----------------------------------------------------------------------------------------------
BankAmerica Corp. 12,000 529,500
-----------------------------------------------------------------------------------------------
C.S. Holdings 1,058 432,130
-----------------------------------------------------------------------------------------------
PT Lippo Bank 133,300 398,176
-----------------------------------------------------------------------------------------------
PT Panin Bank(2) 350,000 639,346
-----------------------------------------------------------------------------------------------
Skandinaviska Enskilda Banken Group(4) 75,000 454,206
-----------------------------------------------------------------------------------------------
Standard Chartered Bank PLC 122,696 507,916
------------
3,572,883
- ----------------------------------------------------------------------------------------------------------------------------------
MONEY CENTER BANKS--0.9% Citicorp 28,600 1,215,500
- ----------------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL--14.7%
- ----------------------------------------------------------------------------------------------------------------------------------
BUILDING MATERIALS GROUP--0.1% Cimentos De Portugal SA 6,000
106,195
- ----------------------------------------------------------------------------------------------------------------------------------
CONGLOMERATES--1.8% Catena AB, Series A Free(4) 100,000 842,236
-----------------------------------------------------------------------------------------------
Commercial del Plata 122,400 424,701
-----------------------------------------------------------------------------------------------
Desc, SA de C.V.(4) 15,000 481,875
-----------------------------------------------------------------------------------------------
Jardine Matheson Holdings Ltd. 100,000 847,655
------------
2,596,467
- ----------------------------------------------------------------------------------------------------------------------------------
CONTAINERS: METAL M C Packaging Corp. Ltd. 1,550,000 722,124
AND GLASS--0.5%
- ----------------------------------------------------------------------------------------------------------------------------------
Electrical Equipment--1.3% BBC Brown Boveri AG 850 732,631
-----------------------------------------------------------------------------------------------
Sasib SpA 116,666 642,411
-----------------------------------------------------------------------------------------------
Sumitomo Electric Industries, Inc. 30,000 442,558
------------
1,817,600
- ----------------------------------------------------------------------------------------------------------------------------------
ENGINEERING AND Empresas ICA Sociedad Controladora SA de C.V. 9,500
306,375
CONSTRUCTION--2.0% -----------------------------------------------------------------------------------------------
Grupo Tribasa, SA de C.V.(4) 11,850 435,488
-----------------------------------------------------------------------------------------------
Juan Minetti SA(4) 55,400 354,538
-----------------------------------------------------------------------------------------------
Leighton Holdings Ltd. 300,000 457,316
-----------------------------------------------------------------------------------------------
Raito Kogyo Co. Ltd. 21,000 498,636
-----------------------------------------------------------------------------------------------
VA Technologie AG(2)(4) 8,000 797,911
------------
2,850,264
</TABLE>
8 Oppenheimer Global Growth & Income Fund
<PAGE>
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MACHINERY: DIVERSIFIED--1.0% Beiren Printing Machinery Holdings, Ltd. 600,000 $
300,497
-----------------------------------------------------------------------------------------------
Bobst Bearers AG 310 394,774
-----------------------------------------------------------------------------------------------
Daifuku 50,000 727,493
------------
1,422,764
- ----------------------------------------------------------------------------------------------------------------------------------
MANUFACTURING: DIVERSIFIED Autoliv AB(4) 34,000 1,022,715
INDUSTRIAL--3.6% -----------------------------------------------------------------------------------------------
CBI Industries, Inc. 23,000 623,875
-----------------------------------------------------------------------------------------------
Filippo Fochi SpA(4) 250,000 772,436
-----------------------------------------------------------------------------------------------
Mitsubishi Heavy Industries Ltd. 78,000 606,850
-----------------------------------------------------------------------------------------------
Stewart & Stevenson Services, Inc. 20,000 760,000
-----------------------------------------------------------------------------------------------
Valmet Corp., Cl. A(4) 37,000 696,189
-----------------------------------------------------------------------------------------------
Vitro Sociedad Anonima, ADR 20,000 517,500
------------
4,999,565
- ----------------------------------------------------------------------------------------------------------------------------------
POLLUTION CONTROL--0.5% Ionics, Inc.(4) 14,000 682,500
- ----------------------------------------------------------------------------------------------------------------------------------
RAILROADS--0.5% Voest-Alpine Eisenbahnsysteme AG(2) 6,000 739,111
- ----------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION: Brambles Industries Ltd. 65,000 658,964
MISCELLANEOUS--3.4% -----------------------------------------------------------------------------------------------
Kvaerner Industrier AS 37,420 1,582,162
-----------------------------------------------------------------------------------------------
Lisnave-Estaleiros Navais de Lisbona SA(4) 22,500 108,518
-----------------------------------------------------------------------------------------------
Malaysian Helicopter Services 40,000 124,014
-----------------------------------------------------------------------------------------------
Malaysian International Shipping Corp. 130,000 433,462
-----------------------------------------------------------------------------------------------
Sembawang Shipyard Ltd. 100,000 802,699
-----------------------------------------------------------------------------------------------
Singmarine Industries Ltd. 175,000 453,289
-----------------------------------------------------------------------------------------------
Unitor Ships Service AS 32,000 582,214
------------
4,745,322
- ----------------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY--13.2%
- ----------------------------------------------------------------------------------------------------------------------------------
COMPUTER SOFTWARE Microsoft Corp.(4) 23,400 1,313,320
AND SERVICES--1.4% -----------------------------------------------------------------------------------------------
Oracle Systems Corp. 15,000 645,000
------------
1,958,320
- ----------------------------------------------------------------------------------------------------------------------------------
COMPUTER SYSTEMS--0.5% International Business Machines Corp. 10,000
695,000
- ----------------------------------------------------------------------------------------------------------------------------------
ELECTRONICS: Advanced Micro Devices, Inc.(4) 18,000 535,500
SEMICONDUCTORS--1.6% -----------------------------------------------------------------------------------------------
Austria Mikro Systeme International(4) 10,000 641,113
-----------------------------------------------------------------------------------------------
Motorola, Inc. 6,000 316,500
-----------------------------------------------------------------------------------------------
National Semiconductor Corp.(4) 18,000 281,250
-----------------------------------------------------------------------------------------------
Tokyo Ohka Kogyo 14,000 523,391
------------
2,297,754
</TABLE>
9 Oppenheimer Global Growth & Income Fund
<PAGE>
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OFFICE EQUIPMENT Canon Inc. 40,000 $ 703,243
AND SUPPLIES--0.5%
- ----------------------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS--9.2% AT&T Corp. 20,000
1,080,000
-----------------------------------------------------------------------------------------------
AirTouch Communications, Inc.(4) 25,000 715,625
-----------------------------------------------------------------------------------------------
Celcaribe SA(2)(4) 284,550 347,816
-----------------------------------------------------------------------------------------------
Comcast UK Cable Partners Ltd.(4) 27,000 516,375
-----------------------------------------------------------------------------------------------
Compania de Telefonos de Chile SA 10,000 877,500
-----------------------------------------------------------------------------------------------
International CableTel, Inc.(4) 30,000 960,000
-----------------------------------------------------------------------------------------------
Korea Mobile Telecommunications 700 630,938
-----------------------------------------------------------------------------------------------
L.M. Ericsson Telephone Co., Sponsored ADR 10,000 537,500
-----------------------------------------------------------------------------------------------
Millicom International Cellular SA(4) 31,225 698,659
-----------------------------------------------------------------------------------------------
Nippon Telegraph & Telephone Corp. 100 889,158
-----------------------------------------------------------------------------------------------
Pakistan Telecommunications, GDR(2)(4) 3,322 642,807
-----------------------------------------------------------------------------------------------
Societa Finanziora Telefonica SpA 108,000 334,731
-----------------------------------------------------------------------------------------------
Technology Resources Industries(4) 100,000 409,479
-----------------------------------------------------------------------------------------------
Telecommunication de Argentina, Cl. B 115,000 768,152
-----------------------------------------------------------------------------------------------
Telecomunicazioni SpA 482,500 1,360,897
-----------------------------------------------------------------------------------------------
Telefonica de Espana, ADS 60,000 809,644
-----------------------------------------------------------------------------------------------
Telefonos de Mexico SA, Sponsored ADR 15,000 937,500
-----------------------------------------------------------------------------------------------
Vodafone Group 157,629 490,948
------------
13,007,729
- ----------------------------------------------------------------------------------------------------------------------------------
UTILITIES--2.5%
- ----------------------------------------------------------------------------------------------------------------------------------
ELECTRIC COMPANIES--1.8% Central Costanera SA, Cl. B 15,000 53,997
-----------------------------------------------------------------------------------------------
Sithe Energies, Inc.(4) 35,000 433,125
-----------------------------------------------------------------------------------------------
Veba AG 5,000 1,658,015
-----------------------------------------------------------------------------------------------
Verbund Oest Electriz 6,500 393,506
------------
2,538,643
- ----------------------------------------------------------------------------------------------------------------------------------
NATURAL GAS--0.7% British Gas PLC 200,000 941,470
------------
Total Common Stocks (Cost $76,721,250) 88,149,331
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
PREFERRED STOCKS--3.8%
- ----------------------------------------------------------------------------------------------------------------------------------
American Express Co. Debt Exchangeable for Common Stock, 6.25% 40,000 1,780,000
-----------------------------------------------------------------------------------------------
Compania de Inversiones en Telecomunicaciones SA Provisionally
Redeemable Income Debt Exchangeable for Stock, 7%, 3/3/98(2) 25,000 1,700,000
-----------------------------------------------------------------------------------------------
Klein, Schanjlin & Becker AG 2,000 444,715
-----------------------------------------------------------------------------------------------
Spar Handels, AG, Non-Vtg. 2,000 451,161
-----------------------------------------------------------------------------------------------
Trafalgar House PLC, 6%, Cum. Cv. 540,000 970,802
------------
Total Preferred Stocks (Cost $5,076,631) 5,346,678
</TABLE>
10 Oppenheimer Global Growth & Income Fund
<PAGE>
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
STRUCTURED INSTRUMENTS--1.1%
- ----------------------------------------------------------------------------------------------------------------------------------
Citibank, 16.75% CD, 12/19/94(5) $ 423,653,758(3) $ 1,027,662
-------------------------------------------------------------------------------------------------
Morgan Guaranty Trust Co. of New York, 12.15% CD, 2/3/95(5) 1,056,625,000(3)
485,570
------------
Total Structured Instruments (Cost $1,484,098) 1,513,232
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $129,022,525) 99.1%
139,715,440
- ----------------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES .9 1,310,018
-------------- ------------
NET ASSETS 100.0% $141,025,458
-------------- ------------
-------------- ------------
<FN>
1. Interest or dividend is paid in kind.
2. Restricted security--See Note 5 of Notes to Financial Statements.
3. Face amount is reported in foreign currency.
4. Non-income producing security.
5. Indexed instrument for which the principal amount at maturity is affected by the relative
value of a foreign currency.
6. Represents a zero coupon bond that converts to a fixed rate of interest at a designated future
date.
7. Represents the current interest rate for a variable rate security.
8. Partial interest payment received.
See accompanying Notes to Financial Statements.
</TABLE>
11 Oppenheimer Global Growth & Income Fund
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES September 30, 1994
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS Investments, at value (cost $129,022,525)--see accompanying statement $139,715,440
-----------------------------------------------------------------------------------------------
Cash 35,008
-----------------------------------------------------------------------------------------------
Receivables:
Dividends and interest 1,241,425
Investments sold 628,062
Shares of beneficial interest sold 522,367
-----------------------------------------------------------------------------------------------
Deferred organization costs 3,322
-----------------------------------------------------------------------------------------------
Other 20,702
------------
Total assets 142,166,326
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES Payables and other liabilities:
Investments purchased 641,979
Shares of beneficial interest redeemed 299,474
Distribution and service plan fees--Note 4 87,170
Other 112,245
------------
Total liabilities 1,140,868
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $141,025,458
------------
------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
COMPOSITION OF Paid-in capital $123,289,382
NET ASSETS -----------------------------------------------------------------------------------------------
Overdistributed net investment income (346,718)
-----------------------------------------------------------------------------------------------
Accumulated net realized gain from investment and foreign currency transactions 7,382,396
-----------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation
of assets and liabilities denominated in foreign currencies 10,700,398
------------
Net assets $141,025,458
------------
------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE Class A Shares:
PER SHARE Net asset value and redemption price per share (based on net
assets of $124,017,204 and 8,154,308 shares of beneficial interest outstanding) $15.21
Maximum offering price per share (net asset value plus sales
charge of 5.75% of offering price) $16.14
-----------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price and offering price per share
(based on net assets of $17,008,254 and 1,121,299 shares of
beneficial interest outstanding) $15.17
See accompanying Notes to Financial Statements.
</TABLE>
12 Oppenheimer Global Growth & Income Fund
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
STATEMENT OF OPERATIONS For the Year Ended September 30, 1994
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME Interest (net of withholding taxes of $11,876) $ 3,739,984
-----------------------------------------------------------------------------------------------
Dividends (net of withholding taxes of $167,303) 1,145,885
------------
Total income 4,885,869
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
EXPENSES Management fees--Note 4 945,062
-----------------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A--Note 4 288,568
Class C--Note 4 65,984
-----------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 272,744
-----------------------------------------------------------------------------------------------
Custodian fees and expenses 130,012
-----------------------------------------------------------------------------------------------
Shareholder reports 88,581
-----------------------------------------------------------------------------------------------
Legal and auditing fees 39,014
-----------------------------------------------------------------------------------------------
Trustees' fees and expenses 13,870
-----------------------------------------------------------------------------------------------
Registration and filing fees:
Class A 9,678
Class C 5,736
-----------------------------------------------------------------------------------------------
Other 47,113
------------
Total expenses 1,906,362
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 2,979,507
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED Net realized gain (loss) from:
GAIN (LOSS) ON INVESTMENTS Investments 8,087,632
AND FOREIGN CURRENCY Foreign currency transactions 345,067
TRANSACTIONS ------------
Net realized gain 8,432,699
-----------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments 1,074,191
Translation of assets and liabilities denominated in foreign currencies 459,238
------------
Net change 1,533,429
------------
Net realized and unrealized gain on investments and foreign currency transactions 9,966,128
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
$ 12,945,635
------------
------------
See accompanying Notes to Financial Statements.
</TABLE>
13 Oppenheimer Global Growth & Income Fund
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
YEAR ENDED SEPTEMBER 30,
1994 1993
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS Net investment income $ 2,979,507 $ 1,607,411
------------------------------------------------------------------------------------------------
Net realized gain on investments and foreign currency
transactions 8,432,699 2,657,100
------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on
investments and translation of assets and liabilities
denominated in foreign currencies 1,533,429 8,068,309
------------ -----------
Net increase in net assets resulting from operations 12,945,635 12,332,820
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND Dividends from net investment income:
DISTRIBUTIONS TO Class A ($.35 and $.173 per share, respectively) (2,811,077) (867,342)
SHAREHOLDERS Class C ($.289 per share) (180,983) --
-----------------------------------------------------------------------------------------------
Distributions from net realized gain on investments
and foreign currency transactions:
Class A ($.481 and $.105 per share, respectively) (3,355,571) (450,227)
Class C ($.481 per share) (7,409) --
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST Net increase in net assets resulting from Class A beneficial
TRANSACTIONS interest transactions--Note 2 31,386,177 25,269,073
-----------------------------------------------------------------------------------------------
Net increase in net assets resulting from Class C beneficial
interest transactions--Note 2 17,029,695 --
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS Total increase 55,006,467 36,284,324
-----------------------------------------------------------------------------------------------
Beginning of year 86,018,991 49,734,667
------------ -----------
End of year [including undistributed (overdistributed) net
investment income of ($346,718) and $854,919, respectively] $141,025,458 $86,018,991
------------ -----------
------------ -----------
See accompanying Notes to Financial Statements.
</TABLE>
14 Oppenheimer Global Growth & Income Fund
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
CLASS A CLASS C
------------------------------------------------- -------------
YEAR ENDED PERIOD ENDED
SEPTEMBER 30, SEPTEMBER 30,
1994 1993 1992 1991(2) 1994(1)
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value,
beginning of period $14.09 $11.91 $12.43 $11.43 $14.85
-----------------------------------------------------------------------------------------------
Income (loss) from
investment operations:
Net investment income .33 .29 .26 .37 .22
Net realized and unrealized
gain (loss) on investments
and foreign currency
transactions 1.62 2.17 (.47) .95 .87
------- ------- ------- ------- -------
Total income (loss) from
investment operations 1.95 2.46 (.21) 1.32 1.09
-----------------------------------------------------------------------------------------------
Dividends and distributions
to shareholders:
Dividends from net investment
income (.35) (.17) (.28) (.32) (.29)
Distributions from net realized
gain on investments and foreign
currency transactions (.48) (.11) (.03) -- (.48)
------- ------- ------- ------- -------
Total dividends and
distributions to shareholders (.83) (.28) (.31) (.32) (.77)
-----------------------------------------------------------------------------------------------
Net asset value, end of period $15.21 $14.09 $11.91 $12.43 $15.17
------- ------- ------- ------- -------
------- ------- ------- ------- -------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET
VALUE(3) 13.96% 21.00% (1.76)% 11.73% 7.41%
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $124,017 $86,019 $49,735 $29,239 $17,008
-----------------------------------------------------------------------------------------------
Average net assets
(in thousands) $117,164 $59,951 $37,116 $19,340 $ 7,896
-----------------------------------------------------------------------------------------------
Number of shares outstanding
at end of period (in
thousands) 8,154 6,104 4,177 2,352 1,121
-----------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 2.44% 2.68% 2.41% 4.05%(4) 1.85%(4)
Expenses 1.49% 1.56% 1.74% 1.94%(4) 2.44%(4)
-----------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 87.4% 90.6% 51.3% 23.5% 87.4%
<FN>
1. For the period from December 1, 1993 (inception of offering) to September 30, 1994.
2. For the period from October 22, 1990 (commencement of operations) to September 30, 1991.
3. Assumes a hypothetical initial investment on the business day before the first day of the
fiscal period, with all dividends and distributions reinvested in additional shares on the
reinvestment date, and redemption at the net asset value calculated on the last business day of
the fiscal period. Sales charges are not reflected in the total returns.
4. Annualized.
5. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly
average of the market value of portfolio securities owned during the period. Securities with a
maturity or expiration date at the time of acquisition of one year or less are excluded from the
calculation. Purchases and sales of investment securities (excluding short-term securities) for
the year ended September 30, 1994 were $149,601,811 and $98,419,511, respectively.
See accompanying Notes to Financial Statements.
</TABLE>
15 Oppenheimer Global Growth & Income Fund
<PAGE>
----------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT Oppenheimer Global Growth & Income Fund (the Fund) is
ACCOUNTING registered under the Investment Company Act of 1940, as
POLICIES amended, as a diversified, open-end management investment
company. The Fund's investment advisor is Oppenheimer
Management Corporation (the Manager). The Fund offers both
Class A and Class C shares. Class A shares are sold with a
front-end sales charge. Class C shares may be subject to a
contingent deferred sales charge. Both classes 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.
The following is a summary of significant accounting
policies consistently followed by the Fund.
----------------------------------------------------------
INVESTMENT VALUATION. Portfolio securities are valued at
4:00 p.m. (New York time) on each trading day. Listed and
unlisted securities for which such information is
regularly reported are valued at the last sale price of
the day or, in the absence of sales, at values based on
the closing bid or asked price or the last sale price on
the prior trading day. Long-term debt securities are
valued by a portfolio pricing service approved by the
Board of Trustees. Long-term debt securities which cannot
be valued by the approved portfolio pricing service are
valued by averaging the mean between the bid and asked
prices obtained from two active market makers in such
securities. Short-term debt securities having a remaining
maturity of 60 days or less are valued at cost (or last
determined market value) adjusted for amortization to
maturity of any premium or discount. Securities for which
market quotes are not readily available are valued under
procedures established by the Board of Trustees to
determine fair value in good faith.
----------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The accounting records of
the Fund are maintained in U.S. dollars. Prices of
securities denominated in foreign currencies are
translated into U.S. dollars at the closing rates of
exchange. Amounts related to the purchase and sale of
securities and investment income are translated at the
rates of exchange prevailing on the respective dates of
such transactions.
The Fund generally enters into forward currency
exchange contracts as a hedge, upon the purchase or sale
of a security denominated in a foreign currency. Risks may
arise from the potential inability of the counterparty to
meet the terms of the contract and from unanticipated
movements in the value of a foreign currency relative to
the U.S. dollar.
The effect of changes in foreign currency
exchange rates on investments is separately identified
from the fluctuations arising from changes in market
values of securities held and reported with all other
foreign currency gains and losses in the Fund's results of
operations.
----------------------------------------------------------
REPURCHASE AGREEMENTS. The Fund requires the custodian to
take possession, to have legally segregated in the Federal
Reserve Book Entry System or to have segregated within the
custodian's vault, all securities held as collateral for
repurchase agreements. If the seller of the agreement
defaults and the value of the collateral declines, or if
the seller enters an insolvency proceeding, realization of
the value of the collateral by the Fund may be delayed or
limited.
----------------------------------------------------------
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.
16 Oppenheimer Global Growth & Income Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT FEDERAL INCOME TAXES. The Fund intends to continue to
ACCOUNTING comply with provisions of the Internal Revenue Code
POLICIES applicable to regulated investment companies and to
(CONTINUED) distribute all of its taxable income, including any net
realized gain on investments not offset by loss
carryovers, to shareholders. Therefore, no federal income
tax provision is required.
----------------------------------------------------------
TRUSTEES' FEES AND EXPENSES. The Fund has adopted a
nonfunded retirement plan for the Fund's independent
trustees. Benefits are based on years of service and fees
paid to each trustee during the years of service. During
the year ended September 30, 1994, a provision of $5,376
was made for the Fund's projected benefit obligations,
resulting in an accumulated liability of $34,106 at
September 30, 1994. No payments have been made under the
plan.
----------------------------------------------------------
ORGANIZATION COSTS. The Manager advanced $15,751 for
organization and start-up costs of the Fund. Such expenses
are being amortized over a five-year period from the date
operations commenced. In the event that all or part of the
Manager's initial investment in shares of the Fund is
withdrawn during the amortization period, the redemption
proceeds will be reduced to reimburse the Fund for any
unamortized expenses, in the same ratio as the number of
shares redeemed bears to the number of initial shares
outstanding at the time of such redemption.
----------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions
to shareholders are recorded on the ex-dividend date.
----------------------------------------------------------
CHANGE IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS.
Effective October 1, 1993, the Fund adopted Statement of
Position 93-2: Determination, Disclosure, and Financial
Statement Presentation of Income, Capital Gain, and Return
of Capital Distributions by Investment Companies. As a
result, the Fund changed the classification of
distributions to shareholders to better disclose the
differences between financial statement amounts and
distributions determined in accordance with income tax
regulations. Accordingly, subsequent to September 30,
1993, amounts have been reclassified to reflect a decrease
in paid-in capital of $135, a decrease in undistributed
net investment income of $946,781, and an increase in
undistributed capital gain on investments of $946,916.
During the year ended September 30, 1994, in accordance
with Statement of Position 93-2, undistributed net
investment income was decreased by $242,303 and
undistributed capital gain was increased by $242,303.
----------------------------------------------------------
OTHER. Investment transactions are accounted for on the
date the investments are purchased or sold (trade date)
and dividend income is recorded on the ex-dividend date.
Discount on securities purchased is amortized over the
life of the respective securities, in accordance with
federal income tax requirements. Realized gains and losses
on investments and unrealized appreciation and
depreciation are determined on an identified cost basis,
which is the same basis used for federal income tax
purposes.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2. SHARES OF The Fund has authorized an unlimited number of no par
BENEFICIAL value shares of beneficial interest of each class.
INTEREST Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30, 1994(1) YEAR ENDED SEPTEMBER
30, 1993
-------------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
Class A:
Sold 4,823,552 $ 73,290,047 3,291,571 $ 42,379,689
Dividends and distributions reinvested 392,494 5,940,555 102,240 1,265,994
Redeemed (3,165,575) (47,844,425) (1,466,579) (18,376,610)
---------- ------------ ---------- ------------
Net increase 2,050,471 $ 31,386,177 1,927,232 $ 25,269,073
---------- ------------ ---------- ------------
---------- ------------ ---------- ------------
------------------------------------------------------------------------------------------------------------
Class C:
Sold 1,177,454 $ 17,876,870 -- $ --
Dividends and distributions reinvested 11,355 170,041 -- --
Redeemed (67,510) (1,017,216) -- --
---------- ------------ ---------- ------------
Net increase 1,121,299 $ 17,029,695 -- $ --
---------- ------------ ---------- ------------
---------- ------------ ---------- ------------
<FN>
1. For the year ended September 30, 1994 for Class A shares and for the period from December 1, 1993
(inception of offering) to September 30, 1994 for Class C shares.
</TABLE>
17 Oppenheimer Global Growth & Income Fund
<PAGE>
----------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Continued)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
3. UNREALIZED GAINS At September 30, 1994, net unrealized appreciation on
AND LOSSES ON investments of $10,692,915 was composed of gross
INVESTMENTS appreciation of $14,960,634, and gross depreciation of
$4,267,719.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. MANAGEMENT FEES Management fees paid to the Manager were in accordance
AND OTHER with the investment advisory agreement with the Fund which
TRANSACTIONS provides for a fee of .80% on the first $250 million of
WITH AFFILIATES average annual net assets; the rate is .77% of the next
$250 million, .75% of the next $500 million, .69% of the
next $1 billion and .67% thereafter. Prior to June 27,
1994, management fees were as follows: .75% on the first
$200 million of net assets with a reduction of .03% on
each $200 million thereafter to $800 million, and .60% on
net assets in excess of $800 million. The Manager has
agreed to reimburse the Fund if aggregate expenses (with
specified exceptions) exceed the most stringent applicable
regulatory limit on Fund expenses.
For the year ended September 30, 1994,
commissions (sales charges paid by investors) on sales of
Class A shares totaled $1,020,885, of which $286,660 was
retained by Oppenheimer Funds Distributor, Inc. (OFDI), a
subsidiary of the Manager, as general distributor, and by
an affiliated broker/dealer. During the year ended
September 30, 1994, OFDI received contingent deferred
sales charges of $3,352 upon redemption of 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 financial institutions. In addition, 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 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 C shares sold prior to
termination or discontinuance of the plan. During the year
ended September 30, 1994, OFDI paid $9,123 to an
affiliated broker/dealer as reimbursement for Class A
personal service and maintenance expenses and retained
$65,984 as reimbursement for Class C sales commissions and
service fee advances, as well as financing costs.
18 Oppenheimer Global Growth & Income Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5. RESTRICTED The Fund owns securities purchased in private placement
SECURITIES transactions, without registration under the Securities
Act of 1933 (the Act). The securities are valued under
methods approved by the Board of Trustees as reflecting
fair value. The Fund intends to invest no more than 10% of
its net assets (determined at the time of purchase) in
restricted and illiquid securities, excluding securities
eligible for resale pursuant to Rule 144A of the Act that
are determined to be liquid by the Board of Trustees or by
the Manager under Board-approved guidelines. Restricted
and illiquid securities, excluding securities eligible for
resale pursuant to Rule 144A of the Act amount to
$1,255,285 or .9% of the Fund's net assets, at September
30, 1994. Illiquid and/or restricted securities, including
those restricted securities that are transferable under
Rule 144A of the Act are listed below.
<TABLE>
<CAPTION>
VALUATION PER UNIT
COST AS OF
SECURITY ACQUISITION DATE PER UNIT SEPTEMBER 30,
1994
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Banco Nacional de Comercio Exterior SNC International
Finance BV Gtd. Matador Bonds, 8%, 8/5/03(1) 11/12/93 $ 97.88 $ 87.25
------------------------------------------------------------------------------------------------------------
Banco Nacional de Mexico SA, 7% Exch. Sub. Debs.,
12/15/99(1) 12/1/92 $100.00 $116.13
------------------------------------------------------------------------------------------------------------
Brazil (Federal Republic of) Bonds, Banco Do
Nordeste Brasil, 10.375%, 11/6/95(1) 4/27/93 $ 99.80 $100.38
------------------------------------------------------------------------------------------------------------
Celcaribe SA(1) 5/17/94 $ 1.19 $ 1.22
------------------------------------------------------------------------------------------------------------
Celcaribe SA, 0%/13.50% Sr. Sec. Nts., 3/15/04(1) 5/17/94 $ 60.78 $ 63.37
------------------------------------------------------------------------------------------------------------
Charter Medical Corp., 11.25% Sr. Sub. Nts., 4/15/04(1) 4/22/94 $100.00 $103.50
------------------------------------------------------------------------------------------------------------
Compania de Inversiones en Telecomunicaciones SA
Provisionally Redeemable Income Debt Exchangeable
for Stock, 7%, 3/3/98(1) 2/24/94--4/20/94 $ 67.40 $ 68.00
------------------------------------------------------------------------------------------------------------
Grupo Televisa SA, Sponsored ADR(1) 4/28/92 $ 27.63 $ 57.88
------------------------------------------------------------------------------------------------------------
Hansol Paper Ltd., Sponsored GDR(1) 5/9/94 $ 53.41 $ 43.82
------------------------------------------------------------------------------------------------------------
Industrial Credit and Investment Corp. India Ltd.,
2.50% Cv. Debs, 4/30/00(1) 2/3/94 $100.00 $ 88.75
------------------------------------------------------------------------------------------------------------
International Container Terminal Services, Inc.,
6% Cv. Sr. Nts., 2/19/00(1) 2/19/93 $100.00 $140.00
------------------------------------------------------------------------------------------------------------
Jindal Strips Ltd., 4.25% Cv. Debs., 3/31/99(1) 11/9/93 $100.00 $134.50
------------------------------------------------------------------------------------------------------------
Mavesa ADR(1) 8/25/94 $ 5.88 $ 6.59
------------------------------------------------------------------------------------------------------------
PT Panin Bank(1) 7/29/93 $ 0.87 $ 1.83
------------------------------------------------------------------------------------------------------------
Pakistan Telecommunications, GDR(1) 9/19/94--9/30/94 $185.16 $193.50
------------------------------------------------------------------------------------------------------------
Piv Investment Financial Cayman
Ltd., 4.50% Cv. Gtd. Bonds, 12/1/00(1) 1/25/94 $100.00 $ 81.50
------------------------------------------------------------------------------------------------------------
Plant Genetics Systems International NV 5/27/92 $ 11.18 $ 9.33
------------------------------------------------------------------------------------------------------------
Polish People's Republic Loan
Participation Agreement, 5.875%, 2/3/24 1/24/94 $ 41.49 $ 39.42
------------------------------------------------------------------------------------------------------------
Shangri-La Asia Ltd., 2.875% Cv. Sub. Debs., 6/6/00(1) 12/9/93 $ 86.24 $ 85.50
------------------------------------------------------------------------------------------------------------
Subic Power Corp., 9.50% Sr. Sec. Nts., Series A,
12/28/08(1) 12/20/93 $ 99.93 $ 92.25
------------------------------------------------------------------------------------------------------------
Thermo Electron Corp., 4.625% Cv. Sr. Debs., 8/1/97(1) 7/15/92 $100.00 $143.75
------------------------------------------------------------------------------------------------------------
Tung Ho Steel Enterprise Corp., GDR(1) 9/9/94 $ 17.20 $ 17.00
------------------------------------------------------------------------------------------------------------
VA Technologie AG(1) 8/26/94--8/30/94 $103.49 $ 99.74
------------------------------------------------------------------------------------------------------------
Voest-Alpine Eisenbahnsysteme AG(1) 7/19/93--12/7/93 $104.98 $123.19
<FN>
1. Transferable under Rule 144A of the Act.
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS March 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
==========================================================
==========================================
<S> <C> <C>
MORTGAGE-BACKED OBLIGATIONS--1.1%
Government National Mortgage Assn., 7.50%, 9/15/22 (Cost $1,581,977) $ 1,557,638 $1,511,252
- ----------------------------------------------------------------------------------------------------
U.S. Government Obligations--6.6%
U.S. Treasury Bonds, 7.625%, 11/15/22 4,410,000 4,469,256
- ----------------------------------------------------------------------------------------------------
U.S. Treasury Nts., 7.75%, 11/30/99 3,500,000 3,589,688
- ----------------------------------------------------------------------------------------------------
U.S. Treasury Nts., 8.50%, 7/15/97 1,000,000 1,035,000
----------
Total U.S. Government Obligations (Cost $9,631,109) 9,093,944
==========================================================
==========================================
FOREIGN GOVERNMENT OBLIGATIONS--12.6%
Argentina (Republic of) Bonds, Bonos de Consolidacion
de Deudas, Series I, 6.062%, 4/1/01(3)(4) 1,771,208 932,302
- ----------------------------------------------------------------------------------------------------
Argentina (Republic of) Par Bonds, 4.25%, 3/31/23(5) 10,000,000 4,081,250
- ----------------------------------------------------------------------------------------------------
Brazil (Federal Republic of) Bonds, Banco do Nordeste Brasil,
10.375%, 11/6/95(2) 1,000,000 995,000
- ----------------------------------------------------------------------------------------------------
Canada (Government of) Debs., 10.50%, 7/1/00 CAD 1,200,000 934,028
- ----------------------------------------------------------------------------------------------------
German Bund (Federal Republic of) Nts., 6.125%, 7/21/97 DEM 2,300,000 1,698,833
- ----------------------------------------------------------------------------------------------------
Italy (Republic of) Treasury Bonds, 11.50%, 5/1/98 ITL 2,000,000,000 1,153,379
- ----------------------------------------------------------------------------------------------------
New South Wales Treasury Corp. Gtd. Exch. Bonds, 12%, 12/1/01 AUD 1,150,000 926,075
- ----------------------------------------------------------------------------------------------------
New Zealand (Republic of) Bonds, 9%, 11/15/96 NZD 1,500,000 986,805
- ----------------------------------------------------------------------------------------------------
Queensland Treasury Corp. Gtd. Nts., 8%, 8/14/01 AUD 2,550,000 1,696,940
- ----------------------------------------------------------------------------------------------------
Spain (Kingdom of) Bonds, 11.45%, 8/30/98 ESP 135,000,000 1,058,035
- ----------------------------------------------------------------------------------------------------
Sweden (Kingdom of) Bonds, 11%, 1/21/99 SEK 7,000,000 952,547
- ----------------------------------------------------------------------------------------------------
United Kingdom Treasury Nts., 10.25%, 11/22/99 GBP 475,000 824,936
- ----------------------------------------------------------------------------------------------------
United Kingdom Treasury Nts., 9.50%, 1/15/99 GBP 600,000 1,012,706
----------
Total Foreign Government Obligations (Cost $17,771,921) 17,252,836
==========================================================
==========================================
NON-CONVERTIBLE CORPORATE BONDS AND NOTES--9.0%
BASIC MATERIALS--0.6%
CHEMICALS--0.3%
Carbide/Graphite Group, Inc., 11.50% Sr. Nts., 9/1/03 350,000 365,750
PAPER--0.3%
PT Inti Indorayon Utama, 9.125% Sr. Nts., 10/15/00 175,000 147,875
- ----------------------------------------------------------------------------------------------------
Stone Consolidated Corp., 10.25% Sr. Sec. Nts., 12/15/00 300,000 304,875
----------
452,750
CONSUMER CYCLICALS--2.1%
AUTOS AND HOUSING--0.9%
Auburn Hills Trust, 12% Gtd. Exch. Certificates, 5/1/20(3) 300,000 415,212
- ----------------------------------------------------------------------------------------------------
Amstar Corp., 11.375% Sr. Sub. Nts., 2/15/97 400,000 400,000
- ----------------------------------------------------------------------------------------------------
Penda Corp., 10.75% Sr. Nts., Series B, 3/1/04 500,000 451,250
----------
1,266,462
LEISURE AND ENTERTAINMENT--0.3%
Family Restaurants, Inc., 9.75% Sr. Nts., 2/1/02 500,000 346,250
RETAIL-GENERAL--0.5%
Southland Corp., 4.50% 2nd Priority Sr. Sub. Debs., Series A, 6/15/04 700,000 453,250
- ----------------------------------------------------------------------------------------------------
Thrifty Payless, Inc., 11.75% Sr. Nts., 4/15/03 250,000 263,125
----------
716,375
</TABLE>
6 Oppenheimer Global Growth & Income Fund
<PAGE> 7
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
==========================================================
=================================================
<S> <C> <C>
RETAIL-SPECIALTY--0.4%
- -----------------------------------------------------------------------------------------------------------
Cole National Group, Inc., 11.25% Sr. Nts., 10/1/01 $ 500,000 $ 480,000
- -----------------------------------------------------------------------------------------------------------
CONSUMER NON-CYCLICALS--1.2%
- -----------------------------------------------------------------------------------------------------------
FOOD--0.6%
- -----------------------------------------------------------------------------------------------------------
Dr. Pepper/Seven-Up Cos., Inc., 0%/11.50% Sr. Sub. Disc. Nts., 11/1/02(6) 556,000 483,720
- -----------------------------------------------------------------------------------------------------------
Grand Union Co., 11.25% Sr. Nts., 7/15/00(7) 300,000 313,875
-----------
797,595
- -----------------------------------------------------------------------------------------------------------
HEALTHCARE/SUPPLIES AND SERVICES--0.4%
Charter Medical Corp., 11.25% Sr. Sub. Nts., 4/15/04 500,000 527,500
- -----------------------------------------------------------------------------------------------------------
HOUSEHOLD GOODS--0.2%
Synthetic Industries, Inc., 12.75% Sr. Sub. Debs., 12/1/02 300,000 292,500
- -----------------------------------------------------------------------------------------------------------
ENERGY--1.0%
- -----------------------------------------------------------------------------------------------------------
ENERGY SERVICES AND PRODUCERS--1.0%
Gulf Canada Resources Ltd., 9.25% Sr. Sub. Debs., 1/15/04 500,000 470,055
- -----------------------------------------------------------------------------------------------------------
Mesa Capital Corp., 0%/12.75% Sec. Disc. Nts., 6/30/98(6) 390,000 376,350
- -----------------------------------------------------------------------------------------------------------
OPI International, Inc., 12.875% Gtd. Sr. Nts., 7/15/02 500,000 552,500
-----------
1,398,905
- -----------------------------------------------------------------------------------------------------------
FINANCIAL--1.6%
- -----------------------------------------------------------------------------------------------------------
BANKS--0.6%
Rabobank Nederland, 10.375% Debs., 6/21/00 ITL 1,500,000,000 821,990
- -----------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL--1.0%
Card Establishment Services, Inc., 10% Sr. Sub. Nts., Series B, 10/1/03 500,000 555,625
- -----------------------------------------------------------------------------------------------------------
GPA Delaware, Inc., 8.75% Gtd. Nts., 12/15/98 500,000 395,000
- -----------------------------------------------------------------------------------------------------------
GPA Holland BV, 9.75% Medium-Term Nts., Series B, 6/10/96 500,000 473,750
-----------
1,424,375
- -----------------------------------------------------------------------------------------------------------
TECHNOLOGY--1.7%
- -----------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS-TECHNOLOGY--1.7%
Celcaribe SA, 0%/13.50% Sr. Sec. Nts., 3/15/04(2)(6) 1,750,000 1,175,229
- -----------------------------------------------------------------------------------------------------------
Panamsat LP/Panamsat Capital Corp., 0%/11.375% Sr. Sub. Disc. Nts., 8/1/03(6) 1,000,000 657,500
- -----------------------------------------------------------------------------------------------------------
USA Mobile Communications, Inc. II, 9.50% Sr. Nts., 2/1/04 500,000 432,500
-----------
2,265,229
- -----------------------------------------------------------------------------------------------------------
UTILITIES--0.8%
- -----------------------------------------------------------------------------------------------------------
ELECTRIC UTILITIES--0.6%
First PV Funding Corp., 10.15% Lease Obligation Bonds, Series 1986B, 1/15/16 500,000 486,804
- -----------------------------------------------------------------------------------------------------------
Subic Power Corp., 9.50% Sinking Fund Debs., 12/28/08(2) 386,206 334,069
-----------
820,873
- -----------------------------------------------------------------------------------------------------------
GAS UTILITIES--0.2%
Beaver Valley II Funding Corp., 9% 2nd Lease Obligation Bonds, 6/1/17 498,000 384,326
-----------
Total Non-Convertible Corporate Bonds and Notes (Cost $13,081,208) 12,360,880
==========================================================
=================================================
Convertible Corporate Bonds and Notes--5.8%
- -----------------------------------------------------------------------------------------------------------
BASIC MATERIALS--0.3%
- -----------------------------------------------------------------------------------------------------------
METALS--0.3%
Jindal Strips Ltd., 4.25% Cv. Debs., 3/31/99 400,000 367,750
- -----------------------------------------------------------------------------------------------------------
CONSUMER CYCLICALS--2.1%
- -----------------------------------------------------------------------------------------------------------
AUTOS AND HOUSING--0.9%
Consorcio G Grupo Dina, SA de C.V., 8% Cv. Sub. Debs., 8/8/04 1,000,000 310,000
- -----------------------------------------------------------------------------------------------------------
Hutchison Delta Finance Ltd., 7% Exch. Gtd. Sr. Nts., 11/8/02(2) 1,000,000 1,021,850
-----------
1,331,850
- -----------------------------------------------------------------------------------------------------------
MEDIA--1.2%
Carlton Communications PLC, 7.50% Cv. Bonds, 8/14/07 GBP 170,000 382,116
- -----------------------------------------------------------------------------------------------------------
Carlton Communications PLC, 7.50% Cv. Sub. Bonds, 8/14/07 GBP 230,000 516,982
- -----------------------------------------------------------------------------------------------------------
Kinnevik Industrifoerval AB, 10.50% Cv. Sub. Debs., 7/21/97(8) SEK 2,500,000 668,247
-----------
1,567,345
</TABLE>
7 Oppenheimer Global Growth & Income Fund
<PAGE> 8
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (Unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
==========================================================
===============================================
<S> <C> <C>
CONSUMER NON-CYCLICALS--1.4%
- ---------------------------------------------------------------------------------------------------------
BEVERAGES--0.7%
Noble China Corp., 9% Cv. Sub. Debs., 11/30/04(9) CAD $1,250,000 $ 953,484
- ---------------------------------------------------------------------------------------------------------
HEALTHCARE/DRUGS--0.7%
ICN Pharmaceuticals, Inc., 8.50% Cv. Sub. Debs., 11/15/99 1,000,000 955,000
- ---------------------------------------------------------------------------------------------------------
ENERGY--0.2%
- ---------------------------------------------------------------------------------------------------------
OIL--INTEGRATED--0.2%
Swift Energy Co., 6.50% Cv. Sub. Debs., 6/30/03 300,000 283,500
- ---------------------------------------------------------------------------------------------------------
FINANCIAL--0.5%
- ---------------------------------------------------------------------------------------------------------
BANKS--0.3%
Banco de Galicia y Buenos Aires SA, 7% Cv. Negotiable Obligation Bonds, 8/1/02 600,000 378,000
- ---------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL--0.2%
Industrial Credit and Investment Corp. India Ltd., 2.50% Cv. Debs., 4/30/00(2) 450,000 330,468
- ---------------------------------------------------------------------------------------------------------
INDUSTRIAL--1.3%
- ---------------------------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--0.9%
Thermo Electron Corp., 4.625% Cv. Sr. Debs., 8/1/97(2) 750,000 1,197,188
- ---------------------------------------------------------------------------------------------------------
INDUSTRIAL SERVICES--0.4%
International Container Terminal Services, Inc., 5% Cv. Sr. Nts., 9/15/01 300,000 230,250
- ---------------------------------------------------------------------------------------------------------
International Container Terminal Services, Inc., 6% Cv. Sr. Nts., 2/19/00(2) 300,000 285,000
------------
515,250
------------
Total Convertible Corporate Bonds and Notes (Cost $8,183,088) 7,879,835
</TABLE>
<TABLE>
<CAPTION>
SHARES
==========================================================
===============================================
<S> <C> <C>
COMMON STOCKS--58.3%
- ---------------------------------------------------------------------------------------------------------
BASIC MATERIALS--3.8%
- ---------------------------------------------------------------------------------------------------------
CHEMICALS--1.2%
Minerals Technologies, Inc. 30,000 967,500
- ---------------------------------------------------------------------------------------------------------
NOVA Corp. 80,000 700,000
------------
1,667,500
- ---------------------------------------------------------------------------------------------------------
METALS--1.2%
Dofasco, Inc. 32,100 406,185
- ---------------------------------------------------------------------------------------------------------
Kangwon Industrial Co. Ltd. 34,000 669,343
- ---------------------------------------------------------------------------------------------------------
Ugine SA 7,000 474,355
------------
1,549,883
- ---------------------------------------------------------------------------------------------------------
PAPER--1.4%
Corticeira Amorim, SA 20,000 318,670
- ---------------------------------------------------------------------------------------------------------
PT Pabrik Kertas Tjiwi Kimia 350,000 625,558
- ---------------------------------------------------------------------------------------------------------
Stora Kopparbergs Bergslags AB 8,400 501,491
- ---------------------------------------------------------------------------------------------------------
Svenska Cellulosa AB 30,000 476,253
------------
1,921,972
- ---------------------------------------------------------------------------------------------------------
CONSUMER CYCLICALS--8.0%
- ---------------------------------------------------------------------------------------------------------
AUTOS AND HOUSING--3.1%
Fiat SpA di Risp. 300,000 701,785
- ---------------------------------------------------------------------------------------------------------
General Motors Corp. 30,000 1,327,500
- ---------------------------------------------------------------------------------------------------------
Philips Electronics NV 50,400 1,726,300
- ---------------------------------------------------------------------------------------------------------
Volvo AB, Series B Free 25,000 432,495
------------
4,188,080
- ---------------------------------------------------------------------------------------------------------
LEISURE AND ENTERTAINMENT--2.2%
Genting Berhad 50,000 450,151
- ---------------------------------------------------------------------------------------------------------
King World Productions, Inc.(10) 13,700 539,438
- ---------------------------------------------------------------------------------------------------------
Nintendo Co. 34,400 2,106,203
------------
3,095,792
</TABLE>
8 Oppenheimer Global Growth & Income Fund
<PAGE> 9
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
==========================================================
===============================================
<S> <C> <C>
MEDIA--1.7%
Comcast Corp. 5,800 $ 90,263
- ---------------------------------------------------------------------------------------------------------
Comcast Corp., Cl. A Special 24,000 375,000
- ---------------------------------------------------------------------------------------------------------
News Corp. Ltd., ADR 40,000 765,000
- ---------------------------------------------------------------------------------------------------------
Telewest Communications PLC, ADR 20,600 563,925
- ---------------------------------------------------------------------------------------------------------
United International Holdings, Inc., Cl. A(10) 32,000 520,000
----------
2,314,188
- ---------------------------------------------------------------------------------------------------------
RETAIL: GENERAL--0.9%
PT Matahari Putra Prima 313,000 475,514
- ---------------------------------------------------------------------------------------------------------
Rinascente SpA, Ordinary 42,000 209,864
- ---------------------------------------------------------------------------------------------------------
Sonae Industria E. Investimentos(10) 20,000 484,239
----------
1,169,617
- ---------------------------------------------------------------------------------------------------------
RETAIL: SPECIALTY--0.1%
Giordano Holdings Ltd. 301,500 200,813
- ---------------------------------------------------------------------------------------------------------
CONSUMER NON-CYCLICALS--10.3%
- ---------------------------------------------------------------------------------------------------------
BEVERAGES--0.8%
Guinness PLC 75,000 569,266
- ---------------------------------------------------------------------------------------------------------
LVMH Moet Hennessy Louis Vuitton 3,000 589,868
----------
1,159,134
- ---------------------------------------------------------------------------------------------------------
FOOD--1.3%
Dairy Farm International Holdings Ltd. 800,000 1,024,000
- ---------------------------------------------------------------------------------------------------------
Mavesa ADR(2) 75,000 295,515
- ---------------------------------------------------------------------------------------------------------
PT Indofood Sukses Makmur 139,250 479,100
----------
1,798,615
- ---------------------------------------------------------------------------------------------------------
HEALTHCARE/DRUGS--5.3%
Amgen, Inc.(10) 14,000 943,250
- ---------------------------------------------------------------------------------------------------------
Astra AB Free, Series A 30,000 797,826
- ---------------------------------------------------------------------------------------------------------
Genzyme Corp.(10) 30,843 1,195,166
- ---------------------------------------------------------------------------------------------------------
Gillette Co. 7,000 571,375
- ---------------------------------------------------------------------------------------------------------
Johnson & Johnson 20,000 1,190,000
- ---------------------------------------------------------------------------------------------------------
Pharmavit GDS(10) 16,000 136,000
- ---------------------------------------------------------------------------------------------------------
Plant Genetics Systems International NV(9)(10) 50,072 309,107
- ---------------------------------------------------------------------------------------------------------
Schering AG 1,500 1,112,538
- ---------------------------------------------------------------------------------------------------------
Sumitomo Chemical Co. Ltd. 100,000 532,407
- ---------------------------------------------------------------------------------------------------------
Takeda Chemical Industries Ltd. 34,000 448,612
----------
7,236,281
- ---------------------------------------------------------------------------------------------------------
HEALTHCARE/SUPPLIES AND SERVICES--2.9%
Arjo AB 30,100 494,177
- ---------------------------------------------------------------------------------------------------------
Circon Corp. 52,500 1,023,750
- ---------------------------------------------------------------------------------------------------------
Pharmacia AB 57,600 1,023,823
- ---------------------------------------------------------------------------------------------------------
Stryker Corp. 20,000 915,000
- ---------------------------------------------------------------------------------------------------------
Takare PLC 150,000 513,072
----------
3,969,822
</TABLE>
9 Oppenheimer Global Growth & Income Fund
<PAGE> 10
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (Unaudited) (Continued)
- --------------------------------------------------------------------------------
MARKET VALUE
SHARES SEE NOTE 1
==========================================================
===============================================
<S> <C> <C>
ENERGY--4.3%
- ---------------------------------------------------------------------------------------------------------
ENERGY SERVICES AND PRODUCERS--1.2%
Baker Hughes, Inc. 35,000 $ 713,125
- ---------------------------------------------------------------------------------------------------------
McDermott International, Inc. 10,000 273,750
- ---------------------------------------------------------------------------------------------------------
Petroleum Geo-Services AS(10) 30,500 683,912
----------
1,670,787
- ---------------------------------------------------------------------------------------------------------
OIL--INTEGRATED--3.1%
British Petroleum Co. PLC 7,000 587,125
- ---------------------------------------------------------------------------------------------------------
Compagnie Francaise de Petroleum Total 8,000 478,400
- ---------------------------------------------------------------------------------------------------------
OeMV AG(10) 5,000 504,110
- ---------------------------------------------------------------------------------------------------------
Repsol SA 16,000 455,873
- ---------------------------------------------------------------------------------------------------------
Royal Dutch Petroleum Co. 11,900 1,428,000
- ---------------------------------------------------------------------------------------------------------
YPF Sociedad Anonima, Sponsored ADR 39,200 744,800
----------
4,198,308
- ---------------------------------------------------------------------------------------------------------
FINANCIAL--8.9%
- ---------------------------------------------------------------------------------------------------------
BANKS--5.2%
Banco Bradesco SA 32,080,000 214,930
- ---------------------------------------------------------------------------------------------------------
Banco Frances del Rio de la Plata SA 30,000 183,045
- ---------------------------------------------------------------------------------------------------------
Banco Latinoamericano de Exportaciones SA, Cl. E 10,000 255,000
- ---------------------------------------------------------------------------------------------------------
Banco Portugues de Investimento 20,000 356,079
- ---------------------------------------------------------------------------------------------------------
Banco Wiese, Sponsored ADR(10) 15,464 108,250
- ---------------------------------------------------------------------------------------------------------
BankAmerica Corp. 13,000 627,250
- ---------------------------------------------------------------------------------------------------------
Chase Manhattan Corp. 15,000 534,375
- ---------------------------------------------------------------------------------------------------------
Chemical Banking Corp. 15,000 566,250
- ---------------------------------------------------------------------------------------------------------
Citicorp 28,600 1,215,500
- ---------------------------------------------------------------------------------------------------------
Credit Local de France 7,000 588,200
- ---------------------------------------------------------------------------------------------------------
J.P. Morgan & Co., Inc. 8,000 488,000
- ---------------------------------------------------------------------------------------------------------
Korea First Bank 13,000 137,392
- ---------------------------------------------------------------------------------------------------------
Northern Trust Corp. 15,000 526,875
- ---------------------------------------------------------------------------------------------------------
PT Panin Bank(2) 341,500 434,885
- ---------------------------------------------------------------------------------------------------------
Turkiye Garanti Bankasi AS, Sponsored ADR(2) 290,000 962,075
----------
7,198,106
- ---------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL--1.6%
American Express Co. 20,000 697,500
- ---------------------------------------------------------------------------------------------------------
H & R Block Inc. 10,000 433,750
- ---------------------------------------------------------------------------------------------------------
Merrill Lynch & Co., Inc. 15,000 639,375
- ---------------------------------------------------------------------------------------------------------
SG Warburg & Co., Inc. Ords. 36,000 420,426
----------
2,191,051
- ---------------------------------------------------------------------------------------------------------
INSURANCE--2.1%
American International Group, Inc. 9,000 938,250
- ---------------------------------------------------------------------------------------------------------
Marschollek, Lautenschlaeger und Partner AG 500 298,504
- ---------------------------------------------------------------------------------------------------------
Reinsurance Australia Corp.(10) 999,800 1,613,367
----------
2,850,121
</TABLE>
10 Oppenheimer Global Growth & Income Fund
<PAGE> 11
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
==========================================================
===============================================
<S> <C> <C>
INDUSTRIAL--8.1%
- ---------------------------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--0.2%
Sasib SpA 70,000 $ 284,603
- ---------------------------------------------------------------------------------------------------------
INDUSTRIAL MATERIALS--0.7%
Cimentos de Portugal SA 12,000 225,701
- ---------------------------------------------------------------------------------------------------------
Stone Container Corp. 30,000 686,250
----------
911,951
- ---------------------------------------------------------------------------------------------------------
INDUSTRIAL SERVICES--2.6%
Adia SA 2,500 459,574
- ---------------------------------------------------------------------------------------------------------
IHC Caland NV 8,650 216,555
- ---------------------------------------------------------------------------------------------------------
Ionics, Inc. 28,000 840,000
- ---------------------------------------------------------------------------------------------------------
ISS International Service System AS, Series B 20,000 545,520
- ---------------------------------------------------------------------------------------------------------
Nittoc Construction 50,000 567,129
- ---------------------------------------------------------------------------------------------------------
Raito Kogyo Co. Ltd. 22,000 529,629
- ---------------------------------------------------------------------------------------------------------
WMX Technologies, Inc. 15,000 412,500
----------
3,570,907
- ---------------------------------------------------------------------------------------------------------
MANUFACTURING--3.0%
Bombardier, Inc. 1,300 25,022
- ---------------------------------------------------------------------------------------------------------
Bucher Holding AG, B Shares 1,250 721,555
- ---------------------------------------------------------------------------------------------------------
Buderus AG 700 368,289
- ---------------------------------------------------------------------------------------------------------
Catena AB Free, Series A(10) 75,000 559,699
- ---------------------------------------------------------------------------------------------------------
Compagnie Generale des Eaux 7,000 712,846
- ---------------------------------------------------------------------------------------------------------
Mitsubishi Heavy Industries Ltd. 78,000 562,430
- ---------------------------------------------------------------------------------------------------------
Powerscreen International PLC 125,000 509,000
- ---------------------------------------------------------------------------------------------------------
VAE Eisenbahnsysteme AG(2) 1,600 155,335
- ---------------------------------------------------------------------------------------------------------
Valmet Corp., Cl. A(10) 25,000 488,550
----------
4,102,726
- ---------------------------------------------------------------------------------------------------------
TRANSPORTATION--1.6%
Brambles Industries Ltd. 50,000 463,569
- ---------------------------------------------------------------------------------------------------------
Kvaerner AS 15,400 670,548
- ---------------------------------------------------------------------------------------------------------
Lisnave-Estaleiros Navais de Lisbona SA(10) 45,000 220,402
- ---------------------------------------------------------------------------------------------------------
Singmarine Industries Ltd. 175,000 436,349
- ---------------------------------------------------------------------------------------------------------
Unitor Ships Service AS 32,000 454,012
----------
2,244,880
- ---------------------------------------------------------------------------------------------------------
TECHNOLOGY--11.1%
- ---------------------------------------------------------------------------------------------------------
COMPUTER HARDWARE--2.1%
Canon USA, Inc. 40,000 662,036
- ---------------------------------------------------------------------------------------------------------
Digital Equipment Corp. 25,000 946,875
- ---------------------------------------------------------------------------------------------------------
International Business Machines Corp. 15,300 1,252,688
----------
2,861,599
- ---------------------------------------------------------------------------------------------------------
COMPUTER SOFTWARE--0.7%
Microsoft Corp.(10) 10,000 711,250
- ---------------------------------------------------------------------------------------------------------
Oracle Systems Corp.(10) 7,500 234,375
----------
945,625
</TABLE>
11 Oppenheimer Global Growth & Income Fund
<PAGE> 12
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (Unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
==========================================================
===============================================
<S> <C> <C>
ELECTRONICS--3.0%
Advanced Micro Devices, Inc.(10) 20,000 $ 677,500
- ---------------------------------------------------------------------------------------------------------
Austria Mikro Systeme International AG 7,000 657,783
- ---------------------------------------------------------------------------------------------------------
General Motors Corp., Cl. H 20,000 825,000
- ---------------------------------------------------------------------------------------------------------
Hewlett-Packard Co. 5,000 601,875
- ---------------------------------------------------------------------------------------------------------
Intel Corp. 6,000 509,250
- ---------------------------------------------------------------------------------------------------------
Motorola, Inc. 16,000 874,000
----------
4,145,408
- ---------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS-TECHNOLOGY--5.3%
Airtouch Communications, Inc.(10) 25,000 681,250
- ---------------------------------------------------------------------------------------------------------
AT&T Corp. 30,000 1,552,500
- ---------------------------------------------------------------------------------------------------------
Cisco Systems, Inc.(10) 20,000 762,500
- ---------------------------------------------------------------------------------------------------------
International CableTel, Inc. 30,000 892,500
- ---------------------------------------------------------------------------------------------------------
Korea Mobile Telecommunications Corp. 1,000 752,520
- ---------------------------------------------------------------------------------------------------------
Korea Mobile Telecommunications GDR(2) 6,400 171,600
- ---------------------------------------------------------------------------------------------------------
Millicom International Cellular SA 41,225 1,092,463
- ---------------------------------------------------------------------------------------------------------
Millicom, Inc. 15,500 --
- ---------------------------------------------------------------------------------------------------------
Pakistan Telecommunications, GDR(2)(10) 2,522 232,024
- ---------------------------------------------------------------------------------------------------------
SR Telecom, Inc. 16,500 166,147
- ---------------------------------------------------------------------------------------------------------
Technology Resources Industries Berhad 150,000 429,421
- ---------------------------------------------------------------------------------------------------------
Vodafone Group 157,629 509,641
----------
7,242,566
- ---------------------------------------------------------------------------------------------------------
UTILITIES--3.8%
- ---------------------------------------------------------------------------------------------------------
ELECTRIC UTILITIES--1.7%
Central Costanera SA, Cl. B 150,000 442,609
- ---------------------------------------------------------------------------------------------------------
Korea Electric Power Co. 20,000 696,802
- ---------------------------------------------------------------------------------------------------------
Sithe Energies, Inc. 26,700 246,975
- ---------------------------------------------------------------------------------------------------------
Veba AG 1,500 546,952
- ---------------------------------------------------------------------------------------------------------
Verbund Oest Electriz 6,500 404,274
----------
2,337,612
- ---------------------------------------------------------------------------------------------------------
GAS UTILITIES--0.9%
British Gas PLC 100,000 466,651
- ---------------------------------------------------------------------------------------------------------
Hong Kong & China Gas 400,000 713,898
----------
1,180,549
- ---------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS--0.2%
Celcaribe SA(2)(10) 284,550 259,771
- ---------------------------------------------------------------------------------------------------------
TELEPHONE UTILITIES--1.0%
Compania Peruana de Telefonos SA 133,300 163,487
- ---------------------------------------------------------------------------------------------------------
Telecom Italia SpA 300,000 701,785
- ---------------------------------------------------------------------------------------------------------
Telecommunication de Argentina, Cl. B 115,000 500,373
----------
1,365,645
----------
Total Common Stocks (Cost $73,949,406) 79,833,912
</TABLE>
12 Oppenheimer Global Growth & Income Fund
<PAGE> 13
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
==========================================================
===============================================
<S> <C> <C>
PREFERRED STOCKS--3.7%
- ---------------------------------------------------------------------------------------------------------
American Express Co., Debt Exchangeable for Common Stock
of First Data Corp., 6.25%, 10/15/96 40,000 $ 1,795,000
- ---------------------------------------------------------------------------------------------------------
Compania de Inversiones en Telecomunicaciones SA, Provisionally
Redeemable Income Debt Exchangeable for Stock, 7%, 3/3/98(2) 15,000 768,750
- ---------------------------------------------------------------------------------------------------------
Fiat SpA(10) 200,000 486,713
- ---------------------------------------------------------------------------------------------------------
Rhoen Klinikum AG 800 561,202
- ---------------------------------------------------------------------------------------------------------
Spar Handels AG, Non-Vtg. 3,000 747,538
- ---------------------------------------------------------------------------------------------------------
Telecomunicacoes Brasileiras SA 24,600,000 663,647
------------
Total Preferred Stocks (Cost $4,805,254) 5,022,850
</TABLE>
<TABLE>
<CAPTION>
UNITS
==========================================================
===============================================
<S> <C> <C>
RIGHTS, WARRANTS AND CERTIFICATES--0.0%
- ---------------------------------------------------------------------------------------------------------
American Satellite Networks Wts., Exp. 6/99 3,875 --
- ---------------------------------------------------------------------------------------------------------
Sasib SpA Wts., Exp. 7/97 16,666 --
------------
Total Rights, Warrants and Certificates (Cost $0) --
</TABLE>
<TABLE>
<CAPTION>
FACE
AMOUNT
==========================================================
===============================================
<S> <C> <C>
REPURCHASE AGREEMENTS--1.8%
- ---------------------------------------------------------------------------------------------------------
Repurchase agreement with First Chicago Capital Markets, 6.25%, dated
3/31/95, to be repurchased at $2,501,302 on 4/3/95, collateralized by
U.S. Treasury Nts., 4.75%--8.875%, 5/15/96--10/31/99, with a value of
$2,181,447 and U.S. Treasury Bonds, 8.125%--12.50%, 8/15/14--8/15/19,
with a value of $371,270 (Cost $2,500,000) $2,500,000 2,500,000
- ---------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $131,503,963) 98.9% 135,455,509
- ---------------------------------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 1.1 1,456,781
---------- ------------
NET ASSETS 100.0% $136,912,290
========== ============
</TABLE>
Distribution of investments by country of issue, as a percentage of total
investments at value, is as follows:
<TABLE>
<CAPTION>
COUNTRY MARKET VALUE PERCENT
==========================================================
======================
<S> <C> <C>
United States $58,881,389 43.5%
- --------------------------------------------------------------------------------
Argentina 8,031,129 5.9
- --------------------------------------------------------------------------------
Great Britain 6,875,845 5.1
- --------------------------------------------------------------------------------
Sweden 5,906,559 4.4
- --------------------------------------------------------------------------------
Australia 5,464,949 4.0
- --------------------------------------------------------------------------------
Japan 5,408,446 4.0
- --------------------------------------------------------------------------------
Germany 5,333,857 3.9
- --------------------------------------------------------------------------------
Italy 4,360,120 3.2
- --------------------------------------------------------------------------------
Canada 3,654,921 2.7
- --------------------------------------------------------------------------------
Netherlands 3,370,856 2.5
- --------------------------------------------------------------------------------
France 2,843,670 2.1
- --------------------------------------------------------------------------------
Korea, Republic of (South) 2,427,655 1.8
- --------------------------------------------------------------------------------
Indonesia 2,162,933 1.6
- --------------------------------------------------------------------------------
Brazil 1,873,578 1.4
- --------------------------------------------------------------------------------
Norway 1,808,472 1.3
- --------------------------------------------------------------------------------
Austria 1,721,502 1.3
- --------------------------------------------------------------------------------
Portugal 1,605,091 1.2
- --------------------------------------------------------------------------------
Spain 1,513,908 1.1
- --------------------------------------------------------------------------------
Singapore 1,460,349 1.1
</TABLE>
13 Oppenheimer Global Growth & Income Fund
<PAGE> 14
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (Unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COUNTRY MARKET VALUE PERCENT
==========================================================
======================
<S> <C> <C>
Colombia 1,435,000 1.1%
- --------------------------------------------------------------------------------
Switzerland 1,181,126 0.9
- --------------------------------------------------------------------------------
New Zealand 986,805 0.7
- --------------------------------------------------------------------------------
Turkey 962,075 0.7
- --------------------------------------------------------------------------------
Hong Kong 914,711 0.7
- --------------------------------------------------------------------------------
Malaysia 879,573 0.6
- --------------------------------------------------------------------------------
Philippines 849,319 0.6
- --------------------------------------------------------------------------------
India 698,219 0.5
- --------------------------------------------------------------------------------
Denmark 545,520 0.4
- --------------------------------------------------------------------------------
Finland 488,549 0.4
- --------------------------------------------------------------------------------
Mexico 310,000 0.2
- --------------------------------------------------------------------------------
Belgium 309,107 0.2
- --------------------------------------------------------------------------------
Venezuela 295,515 0.2
- --------------------------------------------------------------------------------
Peru 271,737 0.2
- --------------------------------------------------------------------------------
Panama 255,000 0.2
- --------------------------------------------------------------------------------
Pakistan 232,024 0.2
- --------------------------------------------------------------------------------
Hungary 136,000 0.1
------------ -----
Total $135,455,509 100.0%
============ =====
</TABLE>
1. Face amount is reported in local currency. Foreign currency abbreviations are
as follows:
AUD--Australian Dollar GBP--British Pound Sterling
CAD--Canadian Dollar NZD--New Zealand Dollar
DEM--German Deutsche Mark SEK--Swedish Krona
ESP--Spanish Peseta
2. 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 $8,618,759 or 6.3% of the Fund's net assets, at March 31,
1995.
3. Represents the current interest rate for a variable rate security.
4. Interest or dividend is paid in kind.
5. Represents the current interest rate for an increasing rate security.
6. Represents a zero coupon bond that converts to a fixed rate of interest at a
designated future date.
7. Non-income producing--issuer is in default of interest payment.
8. 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 period ended March 31, 1995.
The aggregate fair value of all securities of affiliated companies as of March
31, 1995 amounted to $668,247. Transactions during the period in which the
issuer was an affiliate are as follows:
<TABLE>
<CAPTION>
BALANCE SEPTEMBER 30, 1994 GROSS ADDITIONS GROSS REDUCTIONS BALANCE
MARCH 31, 1995
-------------------------- --------------- ------------------- ----------------------
FACE COST FACE COST FACE COST FACE COST
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
<C>
Kinnevik Industrifoerval AB,
10.50% Cv. Sub. Debs., 7/21/97 SEK 5,000,000 $1,028,610 -- $ -- 2,500,000 $514,305 2,500,000 $514,305
</TABLE>
<TABLE>
<CAPTION>
INTEREST
INCOME
- ---------------------------------------------
<S> <C>
Kinnevik Industrifoerval AB,
10.50% Cv. Sub. Debs., 7/21/97 SEK $30,903
</TABLE>
9. Identifies issues considered to be illiquid--See Note 6 of Notes to Financial
Statements.
10. Non-income producing security.
See accompanying Notes to Financial Statements.
14 Oppenheimer Global Growth & Income Fund
<PAGE> 15
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES MARCH 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
==========================================================
=================================================
<S> <C> <C>
ASSETS
Investments, at value (cost $131,503,963)--see accompanying statement $135,455,509
- -----------------------------------------------------------------------------------------------------------
Cash 297,142
- -----------------------------------------------------------------------------------------------------------
Receivables:
Interest and dividends 1,475,098
Investments sold 1,346,989
Shares of beneficial interest sold 470,872
- -----------------------------------------------------------------------------------------------------------
Other 12,804
------------
Total assets 139,058,414
==========================================================
=================================================
LIABILITIES
Unrealized depreciation on forward foreign currency exchange contracts--Note 5 22,818
- -----------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Shares of beneficial interest redeemed 952,949
Investments purchased 924,117
Distribution and service plan fees--Note 4 82,009
Trustees' fees 2,986
Other 161,245
------------
Total liabilities 2,146,124
==========================================================
=================================================
NET ASSETS $136,912,290
============
==========================================================
=================================================
COMPOSITION OF NET ASSETS
Paid-in capital $135,035,968
- -----------------------------------------------------------------------------------------------------------
Overdistributed net investment income (502,838)
- -----------------------------------------------------------------------------------------------------------
Accumulated net realized loss from investment and foreign currency transactions (1,572,284)
- -----------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation
of assets and liabilities denominated in foreign currencies 3,951,444
------------
Net assets $136,912,290
============
==========================================================
=================================================
NET ASSET VALUE PER SHARE
Class A Shares:
Net asset value and redemption price per share (based on net
assets of $115,269,801 and 8,479,998 shares of beneficial interest outstanding) $13.59
Maximum offering price per share (net asset value plus sales
charge of 5.75% of offering price) $14.42
- -----------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price and offering price per share
(based on net assets of $21,642,489 and 1,598,055 shares of beneficial interest outstanding) $13.54
</TABLE>
See accompanying Notes to Financial Statements.
15 Oppenheimer Global Growth & Income Fund
<PAGE> 16
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS For the Six Months Ended March 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
==========================================================
=================================================
<S> <C>
INVESTMENT INCOME
Interest:
Unaffiliated companies (net of foreign withholding taxes of $9,492) $ 2,622,212
Affiliated companies 30,903
- -----------------------------------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $32,530) 369,885
-----------
Total income 3,023,000
==========================================================
=================================================
EXPENSES
Management fees--Note 4 565,640
- -----------------------------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A--Note 4 144,855
Class C--Note 4 96,124
- -----------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 180,039
- -----------------------------------------------------------------------------------------------------------
Custodian fees and expenses 92,736
- -----------------------------------------------------------------------------------------------------------
Shareholder reports 90,993
- -----------------------------------------------------------------------------------------------------------
Legal and auditing fees 42,507
- -----------------------------------------------------------------------------------------------------------
Trustees' fees and expenses 4,725
- -----------------------------------------------------------------------------------------------------------
Registration and filing fees--Class C 1,861
- -----------------------------------------------------------------------------------------------------------
Other 22,474
-----------
Total expenses 1,241,954
==========================================================
=================================================
NET INVESTMENT INCOME 1,781,046
==========================================================
=================================================
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS
Net realized gain (loss) from:
Investments (3,000,527)
Foreign currency transactions 2,132,304
-----------
Net realized loss (868,223)
- -----------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments (7,607,392)
Translation of assets and liabilities denominated in foreign currencies 858,438
-----------
Net change (6,748,954)
-----------
Net realized and unrealized loss on investments and foreign currency transactions (7,617,177)
==========================================================
=================================================
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(5,836,131)
===========
</TABLE>
See accompanying Notes to Financial Statements.
16 Oppenheimer Global Growth & Income Fund
<PAGE> 17
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 1995 SEPTEMBER 30,
(UNAUDITED) 1994
==========================================================
========================================================
<S> <C> <C>
OPERATIONS
Net investment income $ 1,781,046 $ 2,979,507
- ------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments and foreign currency transactions (868,223) 8,432,699
- ------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on investments
and translation of assets and liabilities denominated in foreign currencies (6,748,954) 1,533,429
------------- -------------
Net increase (decrease) in net assets resulting from operations (5,836,131) 12,945,635
==========================================================
========================================================
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income:
Class A ($.20 and $.35 per share, respectively) (1,709,401) (2,811,077)
Class C ($.157 and $.289 per share, respectively) (227,765) (180,983)
- ------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain on investments
and foreign currency transactions:
Class A ($.818 and $.481 per share, respectively) (6,990,963) (3,355,571)
Class C ($.818 and $.481 per share, respectively) (1,095,494) (7,409)
==========================================================
========================================================
BENEFICIAL INTEREST TRANSACTIONS
Net increase in net assets resulting from Class A beneficial
interest transactions--Note 2 5,042,400 31,386,177
- ------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from Class C beneficial
interest transactions--Note 2 6,704,186 17,029,695
==========================================================
========================================================
NET ASSETS
Total increase (decrease) (4,113,168) 55,006,467
- ------------------------------------------------------------------------------------------------------------------
Beginning of period 141,025,458 86,018,991
------------- -------------
End of period (including overdistributed net investment
income of $502,838 and $346,718, respectively) $136,912,290 $141,025,458
</TABLE>
See accompanying Notes to Financial Statements.
17 Oppenheimer Global Growth & Income Fund
<PAGE> 18
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS A CLASS C
------------------------------------------------------------- -------------------------
SIX MONTHS SIX MONTHS PERIOD
ENDED MAR. 31, YEAR ENDED ENDED ENDED
1995 SEPTEMBER 30, MAR. 31, 1995 SEPT. 30,
(UNAUDITED) 1994 1993 1992 1991(2) (UNAUDITED) 1994(1)
==========================================================
==========================================================
=============
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning
of period $15.21 $14.09 $11.91 $12.43 $11.43 $15.17 $14.85
- --------------------------------------------------------------------------------------------------------------------------------
Income (loss) from
investment operations:
Net investment income .19 .33 .29 .26 .37 .14 .22
Net realized and unrealized gain
(loss) on investments and foreign
currency transactions (.79) 1.62 2.17 (.47) .95 (.79) .87
------ ------ ------ ------ ------ ------ ------
Total income (loss) from
investment operations (.60) 1.95 2.46 (.21) 1.32 (.65) 1.09
- --------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to
shareholders:
Dividends from net investment
income (.20) (.35) (.17) (.28) (.32) (.16) (.29)
Distributions from net realized
gain on investments and foreign
currency transactions (.82) (.48) (.11) (.03) -- (.82) (.48)
------ ------ ------ ------ ------ ------ ------
Total dividends and distributions
to shareholders (1.02) (.83) (.28) (.31) (.32) (.98) (.77)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $13.59 $15.21 $14.09 $11.91 $12.43 $13.54 $15.17
------ ------ ------ ------ ------ ------ ------
==========================================================
==========================================================
============
TOTAL RETURN, AT NET ASSET VALUE(3) (3.85)% 13.96% 21.00% (1.76)% 11.73% (4.23)%
7.41%
==========================================================
==========================================================
============
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $115,270 $124,017 $86,019 $49,735 $29,239 $21,642 $17,008
- --------------------------------------------------------------------------------------------------------------------------------
Average net assets
(in thousands) $122,565 $117,164 $59,951 $37,116 $19,340 $19,216 $7,896
- --------------------------------------------------------------------------------------------------------------------------------
Number of shares outstanding at
end of period (in thousands) 8,480 8,154 6,104 4,177 2,352 1,598 1,121
- --------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 2.63%(4) 2.44% 2.68% 2.41% 4.05%(4) 1.85%(4)
1.85%(4)
Expenses 1.65%(4) 1.49% 1.56% 1.74% 1.94%(4) 2.42%(4) 2.44%(4)
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 51.9% 87.4% 90.6% 51.3% 23.5% 51.9% 87.4%
</TABLE>
1. For the period from December 1, 1993 (inception of offering) to
September 30, 1994.
2. For the period from October 22, 1990 (commencement of operations) to
September 30, 1991.
3. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period, with all dividends and distributions reinvested
in additional shares on the reinvestment date, and redemption at the net asset
value calculated on the last business day of the fiscal period. Sales charges
are not reflected in the total returns. Total returns are not annualized for
periods of less than one full year.
4. Annualized.
5. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the six
months ended March 31, 1995 were $71,254,436 and $66,800,064, respectively.
See accompanying Notes to Financial Statements.
18 Oppenheimer Global Growth & Income Fund
<PAGE> 19
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Global Growth & Income Fund (the Fund) is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The Fund's investment advisor is Oppenheimer
Management Corporation (the Manager). The Fund offers both Class A and Class C
shares. Class A shares are sold with a front-end sales charge. Class C shares
may be subject to a contingent deferred sales charge. Both classes of shares
have identical rights to earnings, assets and voting privileges, except that
each class has its own distribution and/or service plan, expenses directly
attributable to a particular class and exclusive voting rights with respect to
matters affecting a single class. 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 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.
- --------------------------------------------------------------------------------
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 results of operations.
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS. The Fund requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. 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.
- --------------------------------------------------------------------------------
TRUSTEES' FEES AND EXPENSES. The Fund has adopted a nonfunded retirement plan
for the Fund's independent trustees. Benefits are based on years of service and
fees paid to each trustee during the years of service. During the six months
ended March 31, 1995, the Fund's projected benefit obligations were reduced by
$3,844, and a payment of $507 was made to a retired trustee resulting in an
accumulated liability of $29,755 at March 31, 1995.
19 Oppenheimer Global Growth & Income Fund
<PAGE> 20
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
- --------------------------------------------------------------------------------
==========================================================
======================
1. SIGNIFICANT ACCOUNTING POLICIES (Continued)
ORGANIZATION COSTS. The Manager advanced $15,751 for organization and start-up
costs of the Fund. Such expenses are being amortized over a five-year period
from the date operations commenced. In the event that all or part of the
Manager's initial investment in shares of the Fund is withdrawn during the
amortization period, the redemption proceeds will be reduced to reimburse the
Fund for any unamortized expenses, in the same ratio as the number of shares
redeemed bears to the number of initial shares outstanding at the time of such
redemption.
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders are
recorded on the ex-dividend date.
- --------------------------------------------------------------------------------
CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax purposes
primarily because of the recognition of certain foreign currency gains (losses)
as ordinary income (loss) for tax purposes. The character of the 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. Effective October 1, 1993, the Fund adopted Statement of
Position 93-2: Determination, Disclosure, and Financial Statement Presentation
of Income, Capital Gain, and Return of Capital Distributions by Investment
Companies. As a result, the Fund changed the classification of distributions to
shareholders to better disclose the differences between financial statement
amounts and distributions determined in accordance with income tax regulations.
- --------------------------------------------------------------------------------
OTHER. Investment transactions are accounted for on the date the investments are
purchased or sold (trade date) and dividend income is recorded on the
ex-dividend date. Discount on securities purchased is amortized over the life of
the respective securities, in accordance with federal income tax requirements.
Realized gains and losses on investments and unrealized appreciation and
depreciation are determined on an identified cost basis, which is the same basis
used for federal income tax purposes.
==========================================================
======================
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>
SIX MONTHS ENDED MARCH 31, 1995 YEAR ENDED SEPTEMBER 30, 1994(1)
------------------------------- --------------------------------
SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 1,755,731 $24,780,283 4,823,552 $73,290,047
Dividends and distributions reinvested 624,865 8,399,907 392,494 5,940,555
Redeemed (2,054,906) (28,137,790) (3,165,575) (47,844,425)
---------- ----------- ---------- -----------
Net increase 325,690 $5,042,400 2,050,471 $31,386,177
- ------------------------------------------------------------------------------------------------------------
Class C:
Sold 574,577 $8,069,956 1,177,454 $17,876,870
Dividends and distributions reinvested 92,552 1,243,086 11,355 170,041
Redeemed (190,373) (2,608,856) (67,510) (1,017,216)
---------- ----------- ---------- -----------
Net increase 476,756 $6,704,186 1,121,299 $17,029,695
</TABLE>
1. For the year ended September 30, 1994 for Class A shares and for the period
from December 1, 1993 (inception of offering) to September 30, 1994 for Class C
shares.
==========================================================
======================
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS
At March 31, 1995, net unrealized appreciation on investments of $3,951,546 was
composed of gross appreciation of $10,256,272, and gross depreciation of
$6,304,726.
==========================================================
======================
4. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund which provides for a fee of .80% on the first
$250 million of average annual net assets; the rate is .77% of the next $250
million, .75% of the next $500 million, .69% of the next $1 billion and .67%
thereafter. The Manager has agreed to reimburse the Fund if aggregate expenses
(with specified exceptions) exceed the most stringent state regulatory limit on
Fund expenses.
20 Oppenheimer Global Growth & Income Fund
<PAGE> 21
==========================================================
======================
4. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES (Continued)
For the six months ended March 31, 1995, commissions (sales charges paid by
investors) on sales of Class A shares totaled $454,728, of which $133,419 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 C shares
totaled $70,231, of which $5,769 was paid to an affiliated broker/dealer. During
the six months ended March 31, 1995, OFDI received contingent deferred sales
charges of $7,747 upon redemption of 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 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 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 C shares sold prior to termination or
discontinuance of the plan. During the six months ended March 31, 1995, OFDI
paid $6,246 and $255, respectively, to an affiliated broker/dealer as
reimbursement for Class A and Class C personal service and maintenance expenses
and retained $96,124 as reimbursement for Class C sales commissions and
service fee advances, as well as financing costs.
==========================================================
======================
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 outstand ing 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 March 31, 1995, the Fund had outstanding forward contracts to purchase and
sell foreign currencies as follows:
<TABLE>
<CAPTION>
NUMBER OF UNREALIZED
EXPIRATION CONTRACTS VALUATION AS OF APPRECIATION
CONTRACTS TO PURCHASE DATE (000s) MARCH 31, 1995 (DEPRECIATION)
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
French Franc 4/28/95 455 $455,566 $ 665
- -------------------------------------------------------------------------------------
Hong Kong Dollar 4/3/95--4/4/95 70 69,539 (5)
- -------------------------------------------------------------------------------------
Japanese Yen 4/5/95 183 183,303 42
- -------------------------------------------------------------------------------------
Netherlands Guilder 4/6/95--4/7/95 214 215,709 1,906
-------- ------
$924,117 $2,608
======== ======
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF UNREALIZED
EXPIRATION CONTRACTS VALUATION AS OF APPRECIATION
CONTRACTS TO PURCHASE DATE (000s) MARCH 31, 1995 (DEPRECIATION)
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Austrian Schilling 4/3/95--4/10/95 903 $926,831 $(23,892)
- -------------------------------------------------------------------------------------
Italian Lira 4/28/95 102 103,092 (945)
- -------------------------------------------------------------------------------------
Swedish Krone 4/3/95--4/5/95 304 304,174 (589)
---------- --------
$1,334,097 (25,426)
========== --------
$(22,818)
========
</TABLE>
21 Oppenheimer Global Growth & Income Fund
<PAGE> 22
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
- --------------------------------------------------------------------------------
==========================================================
======================
6. ILLIQUID SECURITIES
At March 31, 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 March 31, 1995 was $1,262,591, which represents .92% 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 MARCH 31, 1995
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Plant Genetics Systems International NV 5/27/92 $11.18 $6.17
- -----------------------------------------------------------------------------------------------
Noble China Corp., 9% Cv. Sub. Debs., 11/30/04 11/21/94 $ .73 $ .76
</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%
limitations specified above.
<PAGE>
Appendix A: Ratings of Investments
Description of Moody's Investors Service, Inc. Bond Ratings
Aaa: Bonds which are rated "Aaa" are judged to be the best quality and
to carry the smallest degree of investment risk. Interest payments are
protected by a large or by an exceptionally stable margin and principal
is secure. While the various protective elements are likely to change,
the changes that can be expected are most unlikely to impair the
fundamentally strong position of such issues.
Aa: Bonds which are rated "Aa" are judged to be of high quality by all
standards. Together with the "Aaa" group, they comprise what are generally
known as "high-grade" bonds. They are rated lower than the best bonds
because margins of protection may not be as large as with "Aaa" securities
or fluctuation of protective elements may be of greater amplitude or there
may be other elements present which make the long-term risks appear
somewhat larger than those of "Aaa" securities.
A: Bonds which are rated "A" possess many favorable investment
attributes and are to be considered as upper-medium grade obligations.
Factors giving security to principal and interest are considered adequate
but elements may be present which suggest a susceptibility to impairment
sometime in the future.
Baa: Bonds which are rated "Baa" are considered medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present
but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such bonds
lack outstanding investment characteristics and have speculative
characteristics as well.
Ba: Bonds which are rated "Ba" are judged to have speculative elements;
their future cannot be considered well-assured. Often the protection of
interest and principal payments may be very moderate and not well
safeguarded during both good and bad times over the future. Uncertainty
of position characterizes bonds in this class.
B: Bonds which are rated "B" generally lack characteristics of
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time
may be small.
Caa: Bonds which are rated "Caa" are of poor standing and may be in
default or there may be present elements of danger with respect to
principal or interest.
Ca: Bonds which are rated "Ca" represent obligations which are
speculative in a high degree and are often in default or have other marked
shortcomings.
C: Bonds which are rated "C" can be regarded as having extremely poor
prospects of ever attaining any real investment standing.
Description of Standard & Poor's Bond Ratings
AAA: "AAA" is the highest rating assigned to a debt obligation and
indicates an extremely strong capacity to pay principal and interest.
AA: Bonds rated "AA" also qualify as high quality debt obligations.
Capacity to pay principal and interest is very strong, and in the majority
of instances they differ from "AAA" issues only in small degree.
A: Bonds rated "A" have a strong capacity to pay principal and
interest, although they are somewhat more susceptible to adverse effects
of change in circumstances and economic conditions.
BBB: The bond investments in which the Fund will principally invest
will be in the lower-rated categories, described below. Bonds rated "BBB"
are regarded as having an adequate capacity to pay principal and interest.
Whereas they normally exhibit protection parameters, adverse economic
conditions or changing circumstances are more likely to lead to a weakened
capacity to pay principal and interest for bonds in this category than for
bonds in the "A" category.
BB, B, CCC, CC: Bonds rated "BB," "B," "CCC" and "CC" are regarded, on
balance, as predominantly speculative with respect to the issuer's
capacity to pay interest and repay principal in accordance with the terms
of the obligation. "BB" indicates the lowest degree of speculation and
"CC" the highest degree. While such bonds will likely have some quality
and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.
C, D: Bonds on which no interest is being paid are rated "C." Bonds
rated "D" are in default and payment of interest and/or repayment of
principal is in arrears.
<PAGE>
Appendix B: Industry Classifications
Aerospace/Defense
Air Transportation
Auto Parts Distribution
Automotive
Bank Holding Companies
Banks
Beverages
Broadcasting
Broker-Dealers
Building Materials
Cable Television
Chemicals
Commercial Finance
Computer Hardware
Computer Software
Conglomerates
Consumer Finance
Containers
Convenience Stores
Department Stores
Diversified Financial
Diversified Media
Drug Stores
Drug Wholesalers
Durable Household Goods
Education
Electric Utilities
Electrical Equipment
Electronics
Energy Services & Producers
Entertainment/Film
Environmental
Food
Gas Utilities
Gold
Health Care/Drugs
Health Care/Supplies & Services
Homebuilders/Real Estate
Hotel/Gaming
Industrial Services
Insurance
Leasing & Factoring
Leisure
Manufacturing
Metals/Mining
Nondurable Household Goods
Oil - Integrated
Paper
Publishing/Printing
Railroads
Restaurants
Savings & Loans
Shipping
Special Purpose Financial
Specialty Retailing
Steel
Supermarkets
Telecommunications - Technology
Telephone - Utility
Textile/Apparel
Tobacco
Toys
Trucking
<PAGE>
Investment Adviser
Oppenheimer Management Corporation
Two World Trade Center
New York, New York 10048-0203
Distributor
Oppenheimer Funds Distributor, Inc.
Two World Trade Center
New York, New York 10048-0203
Transfer Agent
Oppenheimer Shareholder Services
P.O. Box 5270
Denver, Colorado 80217
1-800-525-7048
Custodian of Portfolio Securities
The Bank of New York
One Wall Street
New York, New York 10015
Independent Auditors
KPMG Peat Marwick LLP
707 Seventeenth Street
Denver, Colorado 80202
Legal Counsel
Gordon Altman Butowsky Weitzen
Shalov & Wein
114 West 47th Street
New York, New York 10036
<PAGE>
OPPENHEIMER GLOBAL GROWTH & INCOME FUND
FORM N-1A
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements
1. Financial Highlights (See Part A, Prospectus): Filed herewith.
2. Independent Auditors' Report (See Part B, Statement of Additional
Information): Filed herewith.
3. Statement of Investments (audited) and March 31, 1995 (unaudited)
(See Part B, Statement of Additional Information): Filed herewith.
4. Statement of Assets and Liabilities (audited) and March 31, 1995
(unaudited) (See Part B, Statement of Additional Information): Filed
herewith.
5. Statement of Operations (See Part B, Statement of Additional
Information): Filed herewith.
6. Statement of Changes in Net Assets (See Part B, Statement of
Additional Information): Filed herewith.
7. Notes to Financial Statements (See Part B, Statement of
Additional Information): Filed herewith.
(b) Exhibits:
1. Amended and Restated Declaration of Trust dated 7/14/95:
Previously filed with Post-Effective Amendment No. 9, 8/9/95,
to Registrant's Registration Statement, and incorporated herein
by reference.
2. By-Laws adopted 8/21/90: Previously filed with Pre-Effective
Amendment No. 1 to Registrant's Registration Statement, 6/29/90,
and refiled with Registrant's Post-Effective Amendment No. 7,
12/1/94, pursuant to Item 102 of Regulation S-T, and
incorporated herein by reference.
3. Not applicable.
4. (i) Specimen Share Certificate for Class A Shares: Previously
filed with Post-Effective Amendment No. 6, to
Registrant's Registration Statement, 1/19/94, and
incorporated herein by reference.
(ii) Specimen Share Certificate for Class C Shares:
Previously filed with Post-Effective Amendment No. 6, to
Registrant's Registration Statement, 1/19/94, and
incorporated herein by reference.
(iii) Specimen Share Certificate for Class B Shares: Filed
herewith.
5. Investment Advisory Agreement dated 6/27/94: Previously
filed with Post-Effective Amendment No. 7 to Registrant's
Registration Statement, 12/1/94, and incorporated herein
by reference.
6. (i) General Distributor's Agreement dated 12/10/92:
Previously filed with Post-Effective Amendment No.
4 to Registrant's Registration Statement, 1/29/93,
and refiled with Post-Effective Amendment to No.
7 to Registrant's Registration Statement, 12/1/94,
pursuant to Item 102 of Regulation S-T, and
incorporated herein by reference.
(ii) Form of Oppenheimer Funds Distributor, Inc. Dealer
Agreement: Previously filed with Post-Effective
Amendment No. 14 to the Registration Statement of
Oppenheimer Main Street Funds, Inc. (Reg. No. 33-
17850), 9/30/94, and incorporated herein by
reference.
(iii) Form of Oppenheimer Funds Distributor, Inc. Broker
Agreement: Previously filed with Post-Effective
Amendment No. 14 to the Registration Statement of
Oppenheimer Main Street Funds, Inc. (Reg. No. 33-
17850), 9/30/94, and incorporated herein by
reference.
(iv) Form of Oppenheimer Funds Distributor, Inc. Agency
Agreement: Previously filed with Post-Effective
Amendment No. 14 to the Registration Statement of
Oppenheimer Main Street Funds, Inc. (Reg. No. 33-
17850), 9/30/94, and incorporated herein by
reference.
(v) Broker Agreement between Oppenheimer Fund
Management, Inc. and Newbridge Securities, Inc.
dated 10/1/86: Previously filed with Post-
Effective Amendment No. 25 of Oppenheimer Special
Fund (Reg. No. 2-45272), 11/1/86, refiled with
Post-Effective Amendment No. 47 of Oppenheimer
Growth Fund (Reg. No. 2-14586) 10/21/94, pursuant
to Item 102 of Regulation S-T, and incorporated
herein by reference.
7. Retirement Plan for Non-Interested Trustees or Directors
(adopted by Registrant 6/7/90): Previously filed with
Post-Effective Amendment No. 97 of Oppenheimer Fund (Reg.
No. 2-14586), 8/30/90, refiled with Post-Effective
Amendment No. 45 of Oppenheimer Special Fund (reg. No. 2-
14586), 10/21/94, pursuant to Item 102 of Regulation S-T
and incorporated herein by reference.
8. Custody Agreement dated 11/12/92: Previously filed with
Post-Effective Amendment No. 4 to Registrant's
Registration Statement, 1/29/93, and refiled with Post-
Effective Amendment, No. 7 to Registrant's Registration
Statement, 12/1/94, pursuant to Item 102 of Regulation S-
T, and incorporated herein by reference.
9. Not Applicable.
10. Opinion and Consent of Counsel dated 9/7/90: Previously
filed with Pre-Effective Amendment No. 2, 9/11/90, and
refiled with Post-Effective Amendment No. 7 to
Registrant's Registration Statement, 12/1/94, pursuant to
Item 102 of Regulation S-T, and incorporated herein by
reference.
11. Independent Auditors' Consent: Filed herewith.
12. Not applicable.
13. Investment Letter dated 8/14/90 from Oppenheimer
Management Corporation to Registrant: Previously filed
with Pre-Effective Amendment No. 2, 9/11/90, to
Registrant's Registration Statement, and incorporated
herein by reference.
14. (i) Form of Individual Retirement Account Plan (IRA):
Previously filed with Post-Effective Amendment No.
21 of Oppenheimer U.S. Government Trust (Reg. No.
2-76645), 8/25/93, and incorporated herein by
reference.
(ii) Form of prototype Standardized and Non-
Standardized Profit Sharing Plan and Money
Purchase Pension Plan for self-employed persons
and corporations: Previously filed with Post-
Effective Amendment No. 15 to the Registration
Statement of Oppenheimer Mortgage Income Fund
(Reg. No. 33-6614), 1/19/95, and incorporated
herein by reference.
(iii) Form of Tax-Sheltered Retirement Plan and Custody
Agreement for employees of public schools and tax-
exempt organizations: Previously filed with Post-
Effective Amendment No. 47 of Oppenheimer
Directors Fund (File No. 2-14586), 10/21/94, and
incorporated herein by reference.
(iv) Form of Simplified Employee Pension IRA:
Previously filed with Post-Effective Amendment No.
42 of Oppenheimer Equity Income Fund (Reg. No. 2-
33043), 10/28/94, and incorporated herein by
reference.
(v) Form of SAR-SEP Simplified Employee Pension IRA:
filed with Post-Effective Amendment No. 15 to the
Registration Statement of Oppenheimer Mortgage
Income Fund (Reg. No. 33-6614), 1/19/95, and
incorporated herein by reference.
15. (i) Service Plan and Agreement for Class A Shares
dated 6/10/93 under Rule 12b-1 of the Investment
Company Act of 1940: Previously filed with Post-
Effective Amendment No. 6 to Registrant's
Registration Statement, 1/19/94, and incorporated
herein by reference.
(ii) Distribution and Service Plan and Agreement for
Class B Shares dated September 1, 1995, under Rule
12b-1 of the Investment Company Act of 1940: Filed
herewith.
(iii) Distribution and Service Plan and Agreement for
Class C Shares dated 12/1/93 under Rule 12b-1 of
the Investment Company Act of 1940: Previously
filed with Post-Effective Amendment No. 6 to
Registrant's Registration Statement, 1/19/94, and
incorporated herein by reference.
16. Performance Data Computation Schedule: Filed herewith.
17. (i) Financial Data Schedule for Class A shares at
9/30/94: Filed herewith.
(ii) Financial Data Schedule for Class B shares at
9/30/94: Not applicable.
(iii) Financial Data Schedule for Class C shares at
9/30/94: Filed herewith.
(iv) Financial Data Schedule for Class A shares at
3/31/95: Filed herewith.
(v) Financial Data Schedule for Class B shares at
3/31/95: Not applicable.
(vi) Financial Data Schedule for Class C shares at
3/31/95: Filed herewith.
18. Not applicable.
19. Powers of Attorney signed by Registrant's Trustees:
Previously filed with Registrant's Post-Effective
Amendment No. 5, 11/22/93, and incorporated herein by
reference.
Item 25. Persons Controlled by or Under Common Control with Registrant
None
Item 26. Number of Holders of Securities
Number of
Record Holders as
Title of Class of September 18, 1995
Class A Shares of Beneficial Interest 17,180
Class B Shares of Beneficial Interest 0
Class C Shares of Beneficial Interest 2,899
Item 27. Indemnification
Reference is made to the provisions of Article SEVENTH of
Registrant's Declaration of Trust.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers and
controlling persons of Registrant pursuant to the foregoing provisions or
otherwise, Registrant has been advised that in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by Registrant of expenses incurred or
paid by a trustee, officer or controlling person of Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
trustee, officer or controlling person, Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as expressed
in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
Item 28. Business and Other Connections of Investment Adviser
(a) Oppenheimer Management Corporation is the investment adviser of
the Registrant; it and certain subsidiaries and affiliates act in the same
capacity to other registered investment companies as described in Parts
A and B hereof and listed in Item 28(b) below.
(b) There is set forth below information as to any other business,
profession, vocation or employment of a substantial nature in which each
officer and director of Oppenheimer Management Corporation is, or at any
time during the past two fiscal years has been, engaged for his/her own
account or in the capacity of director, officer, employee, partner or
trustee.
<TABLE>
<CAPTION>
Name & Current Position
with Oppenheimer Other Business and Connections
Management Corporation During the Past Two Years
- ----------------------- ------------------------------
<S> <C>
Lawrence Apolito, None.
Vice President
James C. Ayer, Jr., Vice President and Portfolio Manager of
Assistant Vice President Oppenheimer Gold & Special Minerals Fund and
Oppenheimer Global Emerging Growth Fund.
Victor Babin, None.
Senior Vice President
Robert J. Bishop Assistant Treasurer of the OppenheimerFunds
Assistant Vice President (listed below); previously a Fund Controller
for Oppenheimer Management Corporation (the
"Manager").
Bruce Bartlett Vice President and Portfolio Manager of
Vice President Oppenheimer Total Return Fund, Inc.,
Oppenheimer Main Street Funds, Inc. and
Oppenheimer Variable Account Funds;
formerly a Vice President and Senior
Portfolio Manager at First of America
Investment Corp.
George Bowen Treasurer of the New York-based
Senior Vice President Oppenheimer funds; Vice President, Secretary
and Treasurer and Treasurer of the Denver-based
Oppenheimer funds. Vice President and
Treasurer of Oppenheimer Funds Distributor,
Inc. (the "Distributor") and HarbourView
Asset Management Corporation
("HarbourView"), an investment adviser
subsidiary of OMC; Senior Vice President,
Treasurer, Assistant Secretary and a
director of Centennial Asset Management
Corporation ("Centennial"), an investment
adviser subsidiary of the Manager; Vice
President, Treasurer and Secretary of
Shareholder Services, Inc. ("SSI") and
Shareholder Financial Services, Inc.
("SFSI"), transfer agent subsidiaries of
OMC; President, Treasurer and Director of
Centennial Capital Corporation; Vice
President and Treasurer of Main Street
Advisers; Vice President/ Comptroller and
Secretary of Oppenheimer
Asset Management Corporation ("OAMC"), an
investment adviser which was a subsidiary of
the OMC.
Michael A. Carbuto, Vice President and Portfolio Manager of
Vice President Oppenheimer Tax-Exempt Cash Reserves,
Centennial California Tax Exempt Trust,
Centennial New York Tax Exempt Trust and
Centennial Tax Exempt Trust; Vice President
of Centennial.
William Colbourne, Formerly, Director of Alternative Staffing
Assistant Vice President Resources, and Vice President of Human
Resources, American Cancer Society.
Lynn Coluccy, Vice President Formerly Vice President\Director of Internal
Audit of the Manager.
O. Leonard Darling, Formerly Co-Director of Fixed Income for
Executive Vice President State Street Research & Management Co.
Robert A. Densen, None.
SeniorVice President
Robert Doll, Jr., Vice President and Portfolio Manager of
Executive Vice President Oppenheimer Growth Fund, Oppenheimer
Variable Account Funds, Oppenheimer Main
Street Funds, Inc. and Oppenheimer
Target Fund; Senior Vice President and
Portfolio Manager of Oppenheimer Strategic
Income & Growth Fund.
John Doney, Vice President Vice President and Portfolio Manager of
Oppenheimer Equity Income Fund.
Andrew J. Donohue, Secretary of the New York-based
Executive Vice President Oppenheimer funds; Vice President of the
& General Counsel Denver-based Oppenheimer funds; Executive
Vice President, Director and General Counsel
of the Distributor; formerly Senior Vice
President and Associate General Counsel of
the Manager and the Distributor.
Kenneth C. Eich, Treasurer of Oppenheimer Acquisition
Executive Vice President/ Corporation
Chief Financial Officer
George Evans, Vice President Vice President and Portfolio Manager of
Oppenheimer Variable Account Funds and Oppenheimer Global Securities Fund.
Scott Farrar, Assistant Treasurer of the OppenheimerFunds;
Assistant Vice President previously a Fund Controller for the
Manager.
Katherine P.Feld Vice President and Secretary of Oppenheimer
Vice President and Funds Distributor, Inc.; Secretary of
Secretary HarbourView, Main Street Advisers, Inc. and
Centennial; Secretary, Vice President and
Director of Centennial Capital Corp.
Jon S. Fossel, President and director of Oppenheimer
Chairman of the Board, Acquisition Corp. ("OAC"), the Manager's
and Director parent holding company; President, CEO and
a director of HarbourView; a director of SSI
and SFSI; President, Director, Trustee, and
Managing General Partner of the Denver-based
Oppenheimer funds; President and Chairman of
the Board of Main Street Advisers, Inc.;
formerly President and CEO of the Manager.
Robert G. Galli, Trustee of the New York-based
Vice Chairman Oppenheimer funds; Vice President and
Counsel
of OAC; formerly he held the following
positions: a director of the Distributor,
Vice President and a director of HarbourView
and Centennial, a director of SFSI and SSI,
an officer of other Oppenheimer funds and
Executive Vice President & General Counsel
of the Manager and the Distributor.
Linda Gardner, None.
Assistant Vice President
Ginger Gonzalez, Formerly 1st Vice President/Director of
Vice President Creative Services for Shearson Lehman
Brothers.
Dorothy Grunwager, None.
Assistant Vice President
Caryn Halbrecht, Vice President and Portfolio Manager of
Vice President Oppenheimer Insured Tax-Exempt Fund and
Oppenheimer Intermediate Tax Exempt Fund; an
officer of other Oppenheimer funds;
formerly Vice President of Fixed Income
Portfolio Management at Bankers Trust.
Barbara Hennigar, President and Director of Shareholder
President and Chief Financial Service, Inc.
Executive Officer of
Oppenheimer Shareholder
Services, a division of OMC.
Alan Hoden, Vice President None.
Merryl Hoffman, None.
Vice President
Scott T. Huebl, None.
Assistant Vice President
Jane Ingalls, Formerly a Senior Associate with Robinson,
Assistant Vice President Lake/Sawyer Miller.
Bennett Inkeles, Formerly employed by Doremus & Company, an
Assistant Vice President advertising agency.
Stephen Jobe, None.
Vice President
Heidi Kagan, None.
Assistant Vice President
Avram Kornberg, Formerly a Vice President with Bankers
Vice President Trust.
Paul LaRocco, Portfolio Manager of Oppenheimer Capital
Assistant Vice President Appreciation Fund and Oppenheimer Variable
Account Funds; Associate Portfolio
Manager of Oppenheimer Discovery Fund.
Formerly a Securities Analyst for Columbus Circle
Investors.
Mitchell J. Lindauer, None.
Vice President
Loretta McCarthy, None.
Senior Vice President
Bridget Macaskill, Director of HarbourView; Director of Main
President, Chief Executive Street Advisers, Inc.; and Chairman of
Officer and Director Shareholder Services, Inc.
Sally Marzouk, None.
Vice President
Marilyn Miller, Formerly a Director of marketing for
Vice President TransAmerica Fund Management Company.
Denis R. Molleur, None.
Vice President
Kenneth Nadler, None.
Vice President
David Negri, Vice President and Portfolio Manager of
Vice President Oppenheimer Strategic Bond Fund, Oppenheimer
Multiple Strategies Fund, Oppenheimer Asset
Allocation Fund, Oppenheimer Strategic
Income Fund, Oppenheimer Strategic Income & Growth Fund,
Oppenheimer High Income Fund, Oppenheimer
Variable Account Funds and
Oppenheimer Bond Fund; an officer of other
Oppenheimer funds.
Barbara Niederbrach, None.
Assistant Vice President
Stuart Novek, Formerly a Director Account Supervisor for
Vice President J. Walter Thompson.
Robert A. Nowaczyk, None.
Vice President
Robert E. Patterson, Vice President and Portfolio Manager of
Senior Vice President Oppenheimer Main Street California Tax-
Exempt Fund, Oppenheimer Insured Tax-Exempt
Fund, Oppenheimer Intermediate Tax-
Exempt Fund, Oppenheimer Florida Tax-
Exempt Fund, Oppenheimer New Jersey Tax-
Exempt Fund, Oppenheimer Pennsylvania Tax-
Exempt Fund, Oppenheimer California Tax-
Exempt Fund, Oppenheimer New York Tax-Exempt
Fund and Oppenheimer Tax-Free Bond Fund;
Vice President of the New York Tax-Exempt
Income Fund, Inc.; Vice President of
Oppenheimer Multi-Sector Income Trust.
Tilghman G. Pitts III, Chairman and Director of the Distributor.
Executive Vice President
and Director
Jane Putnam, Associate Portfolio Manager of Oppenheimer
Assistant Vice President Growth Fund and Oppenheimer Target Fund.
Vice President and Portfolio Manager for Oppenheimer Variable Account
Funds. Formerly Fund; Senior Investment Officer and
Portfolio Manager with Chemical Bank.
Russell Read, Formerly an International Finance Consultant
Vice President for Dow Chemical.
Thomas Reedy, Vice President of Oppenheimer Multi-Sector
Vice President Income Trust and Oppenheimer Multi-
Government Trust; an officer of other
Oppenheimer funds; formerly a Securities
Analyst for the Manager.
David Robertson, None.
Vice President
Adam Rochlin, Formerly a Product Manager for Metropolitan
Assistant Vice President Life Insurance Company.
David Rosenberg, Vice President and Portfolio Manager of
Vice President Oppenheimer Limited-Term Government Fund and
Oppenheimer U.S. Government Trust. Formerly
Vice President and Senior Portfolio Manager
for Delaware Investment Advisors.
Richard H. Rubinstein, Vice President and Portfolio Manager of
Vice President Oppenheimer Asset Allocation Fund,
Oppenheimer Fund and Oppenheimer Multiple
Strategies Fund; an officer of other
Oppenheimer funds; formerly Vice President
and Portfolio Manager/Security Analyst for
Oppenheimer Capital Corp., an investment
adviser.
Lawrence Rudnick, Formerly Vice President of Dollar Dry Dock
Assistant Vice President Bank.
James Ruff, None.
Executive Vice President
Ellen Schoenfeld, None.
Assistant Vice President
Diane Sobin, Vice President and Portfolio Manager of
Vice President Oppenheimer Total Return Fund, Inc.
Oppenheimer Main Street Funds, Inc. and
Oppenheimre Variable Account Funds;
formerly a Vice President and Senior
Portfolio Manager for Dean Witter
InterCapital, Inc.
Nancy Sperte, None.
Senior Vice President
Donald W. Spiro, President and Trustee of the New York-based
Chairman Emeritus Oppenheimer funds; formerly Chairman of the
and Director Manager and the Distributor.
Arthur Steinmetz, Vice President and Portfolio Manager of
Senior Vice President Oppenheimer Strategic Income Fund,
Oppenheimer Strategic Income & Growth Fund;
an officer of other Oppenheimer funds.
Ralph Stellmacher, Vice President and Portfolio Manager of
Senior Vice President Oppenheimer Champion Income Fund and
Oppenheimer High Yield Fund; an officer of
other Oppenheimer funds.
John Stoma, Vice President Formerly Vice President of Pension Marketing
with Manulife Financial.
James C. Swain, Chairman, CEO and Trustee, Director or
Vice Chairman of the Managing Partner of the Denver-based
Board of Directors Oppenheimer funds; President and a Director
and Director of Centennial; formerly President and
Director of OAMC, and Chairman of the Board
of SSI.
James Tobin, Vice President None.
Jay Tracey, Vice President Vice President of the Manager; Vice
President and Portfolio Manager of
Oppenheimer Discovery Fund. Formerly
Managing Director of Buckingham Capital
Management.
Gary Tyc, Vice President, Assistant Treasurer of the Distributor and
Assistant Secretary SFSI.
and Assistant Treasurer
Ashwin Vasan, Vice President and Portfolio Manager of
Vice President Oppenheimer Multi-Sector Income Trust,
Oppenheimer Multi-Government Trust and
Oppenheimer International Bond Fund; an
officer of other Oppenheimer funds.
Valerie Victorson, None.
Vice President
Dorothy Warmack, Vice President and Portfolio Manager of
Vice President Daily Cash Accumulation Fund, Inc.,
Oppenheimer Cash Reserves, Centennial
America Fund, L.P., Centennial Government
Trust and Centennial Money Market Trust;
Vice President of Centennial.
Christine Wells, None.
Vice President
William L. Wilby, Vice President and Portfolio Manager of
Senior Vice President Oppenheimer Global Fund and Oppenheimer
Global Growth & Income Fund; Vice President
of HarbourView; an officer of other
Oppenheimer funds.
Susan Wilson-Perez, None.
Vice President
Carol Wolf, Vice President and Portfolio Manager of
Vice President Oppenheimer Money Market Fund, Inc.,
Centennial America Fund, L.P., Centennial
Government Trust, Centennial Money Market
Trust and Daily Cash Accumulation Fund,
Inc.; Vice President of Oppenheimer Multi-
Sector Income Trust; Vice President of
Centennial.
Robert G. Zack, Associate General Counsel of the Manager;
Senior Vice President Assistant Secretary of the Oppenheimer
funds; and Assistant Secretary of SSI, SFSI;
an officer of other Oppenheimer funds.
Eva A. Zeff, An officer of certain Oppenheimer funds;
Assistant Vice President formerly a Securities Analyst for the
Manager.
Arthur J. Zimmer, Vice President and Portfolio Manager of
Vice President Centennial America Fund, L.P., Oppenheimer
Money Fund, Centennial Government Trust,
Centennial Money Market Trust and Daily Cash
Accumulation Fund, Inc.; Vice President of
Oppenheimer Multi-Sector Income Trust; Vice
President of Centennial; an officer of other
Oppenheimer funds.
</TABLE>
The OppenheimerFunds include the New York-based Oppenheimer
funds and the Denver-based Oppenheimer funds set forth below:
New York-based Oppenheimer funds
Oppenheimer Asset Allocation Fund
Oppenheimer California Tax-Exempt Fund
Oppenheimer Discovery Fund
Oppenheimer Global Emerging Growth Fund
Oppenheimer Global Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Growth Fund
Oppenheimer Money Market Fund, Inc.
Oppenheimer Multi-Government Trust
Oppenheimer Multi-Sector Income Trust
Oppenheimer Multi-State Tax-Exempt Trust
Oppenheimer New York Tax-Exempt Fund
Oppenheimer Fund
Oppenheimer Target Fund
Oppenheimer Tax-Free Bond Fund
Oppenheimer U.S. Government Trust
Denver-based Oppenheimer funds
Oppenheimer Cash Reserves
Centennial America Fund, L.P.
Centennial California Tax Exempt Trust
Centennial Government Trust
Centennial Money Market Trust
Centennial New York Tax Exempt Trust
Centennial Tax Exempt Trust
Daily Cash Accumulation Fund, Inc.
The New York Tax-Exempt Income Fund, Inc.
Oppenheimer Champion Income Fund
Oppenheimer Equity Income Fund
Oppenheimer High Yield Fund
Oppenheimer Integrity Funds
Oppenheimer International Bond Fund
Oppenheimer Limited-Term Government Fund
Oppenheimer Main Street Funds, Inc.
Oppenheimer Strategic Funds Trust
Oppenheimer Strategic Income & Growth Fund
Oppenheimer Tax-Exempt Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer Variable Account Funds
The address of Oppenheimer Management Corporation, the New York-
based Oppenheimer funds, Oppenheimer Funds Distributor, Inc., Harbourview
Asset Management Corp., Oppenheimer Partnership Holdings, Inc., and
Oppenheimer Acquisition Corp. is Two World Trade Center, New York, New
York 10048-0203.
The address of the Denver-based Oppenheimer funds, Shareholder
Financial Services, Inc., Shareholder Services, Inc., Oppenheimer
Shareholder Services, Centennial Asset Management Corporation, Centennial
Capital Corp., and Main Street Advisers, Inc. is 3410 South Galena Street,
Denver, Colorado 80231.
Item 29. Principal Underwriter
(a) Oppenheimer Funds Distributor, Inc. is the Distributor of
Registrant's shares. It is also the Distributor of each of the other
registered open-end investment companies for which Oppenheimer Management
Corporation is the investment adviser, as described in Part A and B of
this Registration Statement and listed in Item 28(b) above.
(b) The directors and officers of the Registrant's principal
underwriter are:
<TABLE>
<CAPTION>
Positions and
Name & Principal Positions & Offices Offices with
Business Address with Underwriter Registrant
- ---------------- ------------------- -------------
<S> <C> <C>
George Clarence Bowen+ Vice President & Treasurer Treasurer
Christopher Blunt Vice President None
6 Baker Avenue
Westport, CT 06880
Julie Bowers Vice President None
21 Dreamwold Road
Scituate, MA 02066
Peter W. Brennan Vice President None
1940 Cotswold Drive
Orlando, FL 32825
Mary Ann Bruce* Senior Vice President - None
Financial Institution Div.
Robert Coli Vice President None
12 Whitetail Lane
Bedminster, NJ 07921
Ronald T. Collins Vice President None
710-3 E. Ponce DeLeon Ave.
Decatur, GA 30030
Mary Crooks+ Vice President None
Paul Della Bovi Vice President None
750 West Broadway
Apt. 5M
Long Beach, NY 11561
Andrew John Donohue* Executive Vice Secretary
President & Director
Wendy H. Ehrlich Vice President None
4 Craig Street
Jericho, NY 11753
Kent Elwell Vice President None
41 Craig Place
Cranford, NJ 07016
John Ewalt Vice President None
2301 Overview Dr. NE
Tacoma, WA 98422
Katherine P. Feld* Vice President & Secretary None
Mark Ferro Vice President None
43 Market Street
Breezy Point, NY 11697
Wendy Fishler* Vice President - None
Financial Institution Div.
Wayne Flanagan Vice President - None
36 West Hill Road Financial Institution Div.
Brookline, NH 03033
Ronald R. Foster Senior Vice President - None
11339 Avant Lane Eastern Division Manager
Cincinnati, OH 45249
Patricia Gadecki Vice President None
6026 First Ave. South,
Apt. 10
St. Petersburg, FL 33707
Luiggino Galleto Vice President None
10239 Rougemont Lane
Charlotte, NC 28277
Mark Giles Vice President - None
5506 Bryn Mawr Financial Institution Div.
Dallas, TX 75209
Ralph Grant* Vice President/National None
Sales Manager - Financial
Institution Div.
Sharon Hamilton Vice President None
720 N. Juanita Ave. - #1
Redondo Beach, CA 90277
Carla Jiminez Vice President None
609 Chimney Bluff Drive
Mt. Pleasant, SC 29464
Michael Keogh* Vice President None
Richard Klein Vice President None
4011 Queen Avenue South
Minneapolis, MN 55410
Hans Klehmet II Vice President None
26542 Love Lane
Ramona, CA 92065
Ilene Kutno* Assistant Vice President None
Wayne A. LeBlang Senior Vice President - None
23 Fox Trail Director Eastern Div.
Lincolnshire, IL 60069
Dawn Lind Vice President - None
7 Maize Court Financial Institution Div.
Melville, NY 11747
James Loehle Vice President None
30 John Street
Cranford, NJ 07016
Laura Mulhall* Senior Vice President - None
Director of Key Accounts
Charles Murray Vice President None
50 Deerwood Drive
Littleton, CO 80127
Joseph Norton Vice President None
1550 Bryant Street
San Francisco, CA 94103
Patrick Palmer Vice President None
958 Blue Mountain Cr.
West Lake Village, CA 91362
Randall Payne Vice President - None
1307 Wandering Way Dr. Financial Institution Div.
Charlotte, NC 28226
Gayle Pereira Vice President None
2707 Via Arboleda
San Clemente, CA 92672
Charles K. Pettit Vice President None
22 Fall Meadow Dr.
Pittsford, NY 14534
Bill Presutti Vice President None
664 Circuit Road
Portsmouth, NH 03801
Tilghman G. Pitts, III* Chairman & Director None
Elaine Puleo* Vice President - None
Financial Institution Div.
Minnie Ra Vice President - None
109 Peach Street Financial Institution Div.
Avenel, NJ 07001
Ian Robertson Vice President None
4204 Summit Wa
Marietta, GA 30066
Robert Romano Vice President None
1512 Fallingbrook Drive
Fishers, IN 46038
James Ruff* President None
Timothy Schoeffler Vice President None
3118 N. Military Road
Arlington, VA 22207
Mark Schon Vice President None
10483 E. Corrine Dr.
Scottsdale, AZ 85259
Michael Sciortino Vice President None
785 Beau Chene Dr.
Mandeville, LA 70448
James A. Shaw Vice President - None
5155 West Fair Place Financial Institution Div.
Littleton, CO 80123
Robert Shore Vice President - None
26 Baroness Lane Financial Institution Div.
Laguna Niguel, CA 92677
Peggy Spilker Vice President - None
2017 N. Cleveland, #2 Financial Institution Div.
Chicago, IL 60614
Michael Stenger Vice President None
C/O America Building
30 East Central Pkwy
Suite 1008
Cincinnati, OH 45202
George Sweeney Vice President None
1855 O'Hara Lane
Middletown, PA 17057
Scott McGregor Tatum Vice President None
7123 Cornelia Lane
Dallas, TX 75214
Dave Thomas Vice President - None
111 South Joliet Circle Financial Institution Div.
#304
Aurora, CO 80112
Philip St. John Trimble Vice President None
2213 West Homer
Chicago, IL 60647
Gary Paul Tyc+ Assistant Treasurer None
Mark Stephen Vandehey+ Vice President None
Gregory K. Wilson Vice President None
2 Side Hill Road
Westport, CT 06880
Bernard J. Wolocko Vice President None
33915 Grand River
Farmington, MI 48335
William Harvey Young+ Vice President None
* Two World Trade Center, New York, NY 10048-0203
+ 3410 South Galena St., Denver, CO 80231
</TABLE>
(c) Not applicable.
ITEM 30. Location of Accounts and Records
The accounts, books and other documents required to be maintained by
Registrant pursuant to Section 31(a) of the Investment Company Act of 1940
and rules promulgated thereunder are in the possession of Oppenheimer
Management Corporation at its offices at 3410 South Galena Street, Denver,
Colorado 80231.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
(d) Registrant undertakes to call a meeting of shareholders for the
purpose of voting upon the question of the removal of a Trustee
or Trustees when requested in writing to do so by the holders
of at least 10% of the Registrant's outstanding shares and in
connection with such meeting to comply with the provisions of
Section 16(c) of the Investment Company Act of 1940 relating to
shareholder communications.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and/or the
Investment Company Act of 1940, the Registrant certifies that it meets all
the requirements for effectiveness of this Registration Statement pursuant
to Rule 485(b) under the Securities Act of 1933 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York and State of New York
on the 9th day of October, 1995.
OPPENHEIMER GLOBAL GROWTH & INCOME FUND
By: /s/ Donald W. Spiro*
------------------------------------
Donald W. Spiro, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities on the dates indicated:
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
/s/ Leon Levy* Chairman of the
- -------------- Board of Trustees October 9, 1995
Leon Levy
/s/ Donald W. Spiro* President, Principal
- -------------------- Executive Officer
Donald W. Spiro and Trustee October 9, 1995
/s/ George Bowen* Treasurer and
- ----------------- Principal Financial
George Bowen and Accounting
Officer October 9, 1995
/s/ Leo Cherne* Trustee October 9, 1995
- ---------------
Leo Cherne
/s/ Robert G. Galli* Trustee October 9, 1995
- -------------------
Robert G. Galli
/s/ Benjamin Lipstein* Trustee October 9, 1995
- ----------------------
Benjamin Lipstein
/s/ Elizabeth B. Moynihan* Trustee October 9, 1995
- --------------------------
Elizabeth B. Moynihan
/s/ Kenneth A. Randall* Trustee October 9, 1995
- -----------------------
Kenneth A. Randall
/s/ Edward V. Regan* Trustee October 9, 1995
- --------------------
Edward V. Regan
/s/ Russell S. Reynolds, Jr.* Trustee October 9, 1995
- -----------------------------
Russell S. Reynolds, Jr.
/s/ Sidney M. Robbins* Trustee October 9, 1995
- ----------------------
Sidney M. Robbins
/s/ Pauline Trigere* Trustee October 9, 1995
- --------------------
Pauline Trigere
/s/ Clayton K. Yeutter* Trustee October 9, 1995
- -----------------------
Clayton K. Yeutter
</TABLE>
*By: /s/ Robert G. Zack
- --------------------------------
Robert G. Zack, Attorney-in-Fact
<PAGE>
OPPENHEIMER GLOBAL GROWTH & INCOME FUND
EXHIBIT INDEX
Item No. Description
- -------- -----------
24(b)(4)(iii) Specimen Class B Share Certificate
24(b)(11) Independent Auditor's Consent
24(b)(15)(ii) Distribution and Service Plan and Agreement for Class
B Shares
24(b)(16) Performance Data Computation Schedule
24(b)(17)(i) Financial Data Schedule for Class A Shares at 9/30/94
24(b)(17)(iii) Financial Data Schedule for Class C Shares at 9/30/94
24(b)(17)(iv) Financial Data Schedule for Class A Shares at 3/31/95
24(b)(17)(vi) Financial Data Schedule for Class C Shares at 3/31/95
OPPENHEIMER GLOBAL GROWTH & INCOME FUND
A MASSACHUSETTS BUSINESS TRUST
Class B Share Certificate (8-1/2" x 11")
I. FACE OF CERTIFICATE (All text and other matter lies within
8-1/4" x 10-3/4" decorative border, 5/16" wide)
(upper left corner, box with heading: NUMBER [of shares]
(upper right corner) share certificate no.
(upper right box with heading: CLASS B SHARES
below cert. no.)
(centered
below boxes) OPPENHEIMER GLOBAL GROWTH & INCOME FUND
(at left) THIS IS TO CERTIFY THAT (at right) SEE REVERSE FOR
CERTAIN DEFINITIONS
(box with number)
CUSIP ________
(at left) is the owner of
(centered) FULLY PAID CLASS B SHARES OF BENEFICIAL INTEREST OF
OPPENHEIMER GLOBAL GROWTH & INCOME FUND
(hereinafter called the "Fund"), transferable only on the
books of the Fund by the holder hereof in person or by
duly authorized attorney, upon surrender of this
certificate properly endorsed. This certificate and the
shares represented hereby are issued and shall be held
subject to all of the provisions of the Declaration of
Trust of the Fund to all of which the holder by acceptance
hereof assents. This certificate is not valid until
countersigned by the Transfer Agent.
WITNESS the facsimile seal of the Fund and the signatures of its
duly authorized officers.
(signature Dated: (signature
at left of seal) at right of seal)
/s/ Andrew J. Donohue /s/ Donald W. Spiro
SECRETARY PRESIDENT
(centered at bottom)
1-1/2" diameter facsimile seal
with legend
OPPENHEIMER GLOBAL GROWTH & INCOME FUND
SEAL
1990
COMMONWEALTH OF MASSACHUSETTS
(at lower right, printed
vertically) Countersigned
OPPENHEIMER SHAREHOLDER SERVICES
(A DIVISION OF OPPENHEIMER MANAGEMENT
CORPORATION)
Denver (CO) Transfer Agent
By ________________________
Authorized Signature
II. BACK OF CERTIFICATE (text reads from top to bottom of 11"
dimension)
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out
in full according to applicable laws or regulations.
TEN COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not
as tenants in common
UNIF GIFT/TRANSFER MIN ACT - __________________ Custodian _______________
(Cust) (Minor)
UNDER UGMA/UTMA __________________
(State)
Additional abbreviations may also be used though not in the above list.
For Value Received ................ hereby sell(s), assign(s), and
transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION BY TRANSFEREE
(box for identifying number)
_______________________________________________________________________
__________________(Please print or type name and address of assignee)
_______________________________________________________________________
________________________________________________Class B Shares of
beneficial interest [capital stock] represented by the within Certificate,
and do hereby irrevocably constitute and appoint
___________________________ Attorney to transfer the said shares on the
books of the within named Fund with full power of substitution in the
premises.
Dated: ______________________
Signed: __________________________
___________________________________
(Both must sign if joint owners)
Signature(s) __________________________
guaranteed Name of Guarantor
by: _____________________________
Signature of
Officer/Title
(text printed NOTICE: The signature(s) to this assignment must
vertically to right correspond with the name(s) as written upon the
of above paragraph) _________________ face of the certificate in every
particular _______________________________________ without alteration or
enlargement or any change _____________________________ whatever.
(text printed in Signatures must be guaranteed by a financial
box to left of institution of the type described in the current
signature(s)) prospectus of the Fund.
PLEASE NOTE: This document contains a watermark OppenheimerFunds
when viewed at an angle. It is invalid without this "four hands"
logotype watermark:
________________________________________________________________________
THIS SPACE MUST NOT BE COVERED IN ANY WAY
Exhibit 24(b)(11)
INDEPENDENT AUDITORS' CONSENT
The Board of Trustees
Oppenheimer Global Growth & Income Fund:
We consent to the use of our report dated October 21, 1994 included herein
and to the reference to our firm under the heading "Financial Highlights"
in Part A of the Fund's Registration Statement.
/s/ KPMG Peat Marwick LLP
- -------------------------
KPMG Peat Marwick LLP
Denver, Colorado
October 3, 1995
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT
WITH
OPPENHEIMER FUNDS DISTRIBUTOR, INC.
FOR CLASS B SHARES OF
OPPENHEIMER GLOBAL GROWTH & INCOME FUND
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT (the "Plan") dated the 1st day
of September, 1995, by and between OPPENHEIMER GLOBAL GROWTH & INCOME FUND
(the "Fund") and OPPENHEIMER FUNDS DISTRIBUTOR, INC. (the "Distributor").
1. The Plan. This Plan is the Fund's written distribution and service
plan for Class B shares of the Fund (the "Shares"), contemplated by Rule
12b-1 (the "Rule") under the Investment Company Act of 1940 (the "1940
Act"), pursuant to which the Fund will compensate the Distributor for its
services in connection with the distribution of Shares, and the personal
service and maintenance of shareholder accounts that hold Shares
("Accounts"). The Fund may act as distributor of securities of which it
is the issuer, pursuant to the Rule, according to the terms of this Plan.
The Distributor is authorized under the Plan to pay "Recipients," as
hereinafter defined, for rendering (1) distribution assistance in
connection with the sale of Shares and/or (2) administrative support
services with respect to Accounts. Such Recipients are intended to have
certain rights as third-party beneficiaries under this Plan. The terms
and provisions of this Plan shall be interpreted and defined in a manner
consistent with the provisions and definitions contained in (i) the 1940
Act, (ii) the Rule, (iii) Article III, Section 26, of the Rules of Fair
Practice of the National Association of Securities Dealers, Inc., or its
successor (the "NASD Rules of Fair Practice") and (iv) any conditions
pertaining either to distribution-related expenses or to a plan of
distribution, to which the Fund is subject under any order on which the
Fund relies, issued at any time by the Securities and Exchange Commission.
2. Definitions. As used in this Plan, the following terms shall have
the following meanings:
(a) "Recipient" shall mean any broker, dealer, bank or other person
or entity which: (i) has rendered assistance (whether direct,
administrative or both) in the distribution of Shares or has provided
administrative support services with respect to Shares held by
Customers (defined below) of the Recipient; (ii) shall furnish the
Distributor (on behalf of the Fund) with such information as the
Distributor shall reasonably request to answer such questions as may
arise concerning the sale of Shares; and (iii) has been selected by
the Distributor to receive payments under the Plan. Notwithstanding
the foregoing, a majority of the Fund's Board of Trustees (the
"Board") who are not "interested persons" (as defined in the 1940
Act) and who have no direct or indirect financial interest in the
operation of this Plan or in any agreements relating to this Plan
(the "Independent Trustees") may remove any broker, dealer, bank or
other person or entity as a Recipient, whereupon such person's or
entity's rights as a third-party beneficiary hereof shall terminate.
(b) "Qualified Holdings" shall mean, as to any Recipient, all Shares
owned beneficially or of record by: (i) such Recipient, or (ii) such
customers, clients and/or accounts as to which such Recipient is a
fiduciary or custodian or co-fiduciary or co-custodian (collectively,
the "Customers"), but in no event shall any such Shares be deemed
owned by more than one Recipient for purposes of this Plan. In the
event that more than one person or entity would otherwise qualify as
Recipients as to the same Shares, the Recipient which is the dealer
of record on the Fund's books as determined by the Distributor shall
be deemed the Recipient as to such Shares for purposes of this Plan.
3. Payments for Distribution Assistance and Administrative Support
Services.
(a) The Fund will make payments to the Distributor, (i) within
forty-five (45) days of the end of each calendar quarter, in the
aggregate amount of 0.0625% (0.25% on an annual basis) of the average
during the calendar quarter of the aggregate net asset value of the
Shares computed as of the close of each business day (the "Service
Fee"), plus (ii) within ten (10) days of the end of each month, in
the aggregate amount of 0.0625% (0.75% on an annual basis) of the
average during the month of the aggregate net asset value of Shares
computed as of the close of each business day (the "Asset-Based Sales
Charge") outstanding for six years or less (the "Maximum Holding
Period"). Such Service Fee payments received from the Fund will
compensate the Distributor and Recipients for providing
administrative support services with respect to Accounts. Such
Asset-Based Sales Charge payments received from the Fund will
compensate the Distributor and Recipients for providing distribution
assistance in connection with the sale of Shares.
The administrative support services in connection with the
Accounts to be rendered by Recipients may include, but shall not be
limited to, the following: answering routine inquiries concerning
the Fund, assisting in the establishment and maintenance of accounts
or sub-accounts in the Fund and processing Share redemption
transactions, making the Fund's investment plans and dividend payment
options available, and providing such other information and services
in connection with the rendering of personal services and/or the
maintenance of Accounts, as the Distributor or the Fund may
reasonably request.
The distribution assistance in connection with the sale of
Shares to be rendered by the Distributor and Recipients may include,
but shall not be limited to, the following: distributing sales
literature and prospectuses other than those furnished to current
holders of the Fund's Shares ("Shareholders"), and providing such
other information and services in connection with the distribution
of Shares as the Distributor or the Fund may reasonably request.
It may be presumed that a Recipient has provided distribution
assistance or administrative support services qualifying for payment
under the Plan if it has Qualified Holdings of Shares to entitle it
to payments under the Plan. In the event that either the Distributor
or the Board should have reason to believe that, notwithstanding the
level of Qualified Holdings, a Recipient may not be rendering
appropriate distribution assistance in connection with the sale of
Shares or administrative support services for Accounts, then the
Distributor, at the request of the Board, shall require the Recipient
to provide a written report or other information to verify that said
Recipient is providing appropriate distribution assistance and/or
services in this regard. If the Distributor or the Board of Trustees
still is not satisfied, either may take appropriate steps to
terminate the Recipient's status as such under the Plan, whereupon
such Recipient's rights as a third-party beneficiary hereunder shall
terminate.
(b) The Distributor shall make service fee payments to any Recipient
quarterly, within forty-five (45) days of the end of each calendar
quarter, at a rate not to exceed 0.0625% (0.25% on an annual basis)
of the average during the calendar quarter of the aggregate net asset
value of Shares computed as of the close of each business day,
constituting Qualified Holdings owned beneficially or of record by
the Recipient or by its Customers for a period of more than the
minimum period (the "Minimum Holding Period"), if any, to be set from
time to time by a majority of the Independent Trustees.
Alternatively, the Distributor may, at its sole option, make
service fee payments ("Advance Service Fee Payments") to any
Recipient quarterly, within forty-five (45) days of the end of each
calendar quarter, at a rate not to exceed (i) 0.25% of the average
during the calendar quarter of the aggregate net asset value of
Shares, computed as of the close of business on the day such Shares
are sold, constituting Qualified Holdings sold by the Recipient
during that quarter and owned beneficially or of record by the
Recipient or by its Customers, plus (ii) 0.0625% (0.25% on an annual
basis) of the average during the calendar quarter of the aggregate
net asset value of Shares computed as of the close of each business
day, constituting Qualified Holdings owned beneficially or of record
by the Recipient or by its Customers for a period of more than one
(1) year, subject to reduction or chargeback so that the Advance
Service Fee Payments do not exceed the limits on payments to
Recipients that are, or may be, imposed by Article III, Section 26,
of the NASD Rules of Fair Practice. In the event Shares are redeemed
less than one year after the date such Shares were sold, the
Recipient is obligated and will repay to the Distributor on demand
a pro rata portion of such Advance Service Fee Payments, based on the
ratio of the time such shares were held to one (1) year.
The Advance Service Fee Payments described in part (i) of this
paragraph (b) may, at the Distributor's sole option, be made more
often than quarterly, and sooner than the end of the calendar
quarter. However, no such payments shall be made to any Recipient
for any such quarter in which its Qualified Holdings do not equal
or exceed, at the end of such quarter, the minimum amount ("Minimum
Qualified Holdings"), if any, to be set from time to time by a
majority of the Independent Trustees.
A majority of the Independent Trustees may at any time or from
time to time decrease and thereafter adjust the rate of fees to be
paid to the Distributor or to any Recipient, but not to exceed the
rate set forth above, and/or direct the Distributor to increase or
decrease the Minimum Holding Period or the Minimum Qualified
Holdings. The Distributor shall notify all Recipients of the Minimum
Qualified Holdings, Maximum Holding Period and Minimum Holding
Period, if any, and the rate of payments hereunder applicable to
Recipients, and shall provide each Recipient with written notice
within thirty (30) days after any change in these provisions.
Inclusion of such provisions or a change in such provisions in a
revised current prospectus shall constitute sufficient notice. The
Distributor may make Plan payments to any "affiliated person" (as
defined in the 1940 Act) of the Distributor if such affiliated person
qualifies as a Recipient.
(c) The Service Fee and the Asset-Based Sales Charge on Shares are
subject to reduction or elimination of such amounts under the limits
to which the Distributor is, or may become, subject under Article
III, Section 26, of the NASD Rules of Fair Practice. The
distribution assistance and administrative support services to be
rendered by the Distributor in connection with the Shares may
include, but shall not be limited to, the following: (i) paying sales
commissions to any broker, dealer, bank or other person or entity
that sells Shares, and\or paying such persons Advance Service Fee
Payments in advance of, and\or greater than, the amount provided for
in Section 3(b) of this Agreement; (ii) paying compensation to and
expenses of personnel of the Distributor who support distribution of
Shares by Recipients; (iii) obtaining financing or providing such
financing from its own resources, or from an affiliate, for the
interest and other borrowing costs of the Distributor's unreimbursed
expenses incurred in rendering distribution assistance and
administrative support services to the Fund; (iv) paying other direct
distribution costs, including without limitation the costs of sales
literature, advertising and prospectuses (other than those furnished
to current Shareholders) and state "blue sky" registration expenses;
and (v) any service rendered by the Distributor that a Recipient may
render pursuant to part (a) of this Section 3. Such services include
distribution assistance and administrative support services rendered
in connection with Shares acquired (i) by purchase, (ii) in exchange
for shares of another investment company for which the Distributor
serves as distributor or sub-distributor, or (ii) pursuant to a plan
of reorganization to which the Fund is a party. In the event that
the Board should have reason to believe that the Distributor may not
be rendering appropriate distribution assistance or administrative
support services in connection with the sale of Shares, then the
Distributor, at the request of the Board, shall provide the Board
with a written report or other information to verify that the
Distributor is providing appropriate services in this regard.
(d) Under the Plan, payments may be made to Recipients: (i) by
Oppenheimer Management Corporation ("OMC") from its own resources
(which may include profits derived from the advisory fee it receives
from the Fund), or (ii) by the Distributor (a subsidiary of OMC),
from its own resources, from Asset-Based Sales Charge payments or
from its borrowings.
(e) Notwithstanding any other provision of this Plan, this Plan does
not obligate or in any way make the Fund liable to make any payment
whatsoever to any person or entity other than directly to the
Distributor. In no event shall the amounts to be paid to the
Distributor exceed the rate of fees to be paid by the Fund to the
Distributor set forth in paragraph (a) of this section 3.
4. Selection and Nomination of Trustees. While this Plan is in effect,
the selection and nomination of those persons to be Trustees of the Fund
who are not "interested persons" of the Fund ("Disinterested Trustees")
shall be committed to the discretion of such Disinterested Trustees.
Nothing herein shall prevent the Disinterested Trustees from soliciting
the views or the involvement of others in such selection or nomination if
the final decision on any such selection and nomination is approved by a
majority of the incumbent Disinterested Trustees.
5. Reports. While this Plan is in effect, the Treasurer of the Fund
shall provide written reports to the Fund's Board for its review,
detailing services rendered in connection with the distribution of the
Shares, the amount of all payments made and the purpose for which the
payments were made. The reports shall be provided quarterly, and shall
state whether all provisions of Section 3 of this Plan have been complied
with.
6. Related Agreements. Any agreement related to this Plan shall be in
writing and shall provide that: (i) such agreement may be terminated at
any time, without payment of any penalty, by a vote of a majority of the
Independent Trustees or by a vote of the holders of a "majority" (as
defined in the 1940 Act) of the Fund's outstanding voting securities of
the Class, on not more than sixty days written notice to any other party
to the agreement; (ii) such agreement shall automatically terminate in the
event of its assignment (as defined in the 1940 Act); (iii) it shall go
into effect when approved by a vote of the Board and its Independent
Trustees cast in person at a meeting called for the purpose of voting on
such agreement; and (iv) it shall, unless terminated as herein provided,
continue in effect from year to year only so long as such continuance is
specifically approved at least annually by a vote of the Board and its
Independent Trustees cast in person at a meeting called for the purpose
of voting on such continuance.
7. Effectiveness, Continuation, Termination and Amendment. This Plan
has been approved by a vote of the Board and its Independent Trustees cast
in person at a meeting called on March 16, 1995, for the purpose of voting
on this Plan, and shall take effect as of the date first set forth above.
Unless terminated as hereinafter provided, it shall continue in effect
until December 31, 1995 and from year to year thereafter or as the Board
may otherwise determine only so long as such continuance is specifically
approved at least annually by a vote of the Board and its Independent
Trustees cast in person at a meeting called for the purpose of voting on
such continuance. This Plan may not be amended to increase materially the
amount of payments to be made without approval of the Class B
Shareholders, in the manner described above, and all material amendments
must be approved by a vote of the Board and of the Independent Trustees.
This Plan may be terminated at any time by vote of a majority of the
Independent Trustees or by the vote of the holders of a "majority" (as
defined in the 1940 Act) of the Fund's outstanding voting securities of
the Class. In the event of such termination, the Board and its
Independent Trustees shall determine whether the Distributor shall be
entitled to payment from the Fund of all or a portion of the Service Fee
and/or the Asset-Based Sales Charge in respect of Shares sold prior to the
effective date of such termination.
8. Disclaimer of Shareholder and Trustee Liability. The Distributor
understands that the obligations of the Fund under this Plan are not
binding upon any Trustee or shareholder of the Fund personally, but bind
only the Fund and the Fund's property. The Distributor represents that
it has notice of the provisions of the Declaration of Trust of the Fund
disclaiming shareholder and Trustee liability for acts or obligations of
the Fund.
OPPENHEIMER GLOBAL GROWTH & INCOME FUND
By: /s/ Robert G. Zack
______________________________
Robert G. Zack
Assistant Secretary
OPPENHEIMER FUNDS DISTRIBUTOR, INC.
By: /s/ Katherine P. Feld
______________________________
Katherine P. Feld
Vice President & Secretary
OFMI\215B
Oppenheimer Global Growth & Income Fund
Exhibit 24(b)(16) to Form N-1A
Performance Data Computation Schedule
The Fund's average annual total returns and total returns are calculated
as described below, on the basis of the Fund's distributions, for the past
10 years which are as follows:
Distribution Amount From Amount From
Reinvestment Investment Long or Short-Term Reinvestment
(Ex)Date Income Capital Gains Price
Class A Shares
12/21/90 0.0500 0.0000 11.320
03/20/91 0.0800 0.0000 11.700
06/17/92 0.0900 0.0000 11.580
09/23/93 0.1000 0.0000 12.340
12/20/91 0.0700 0.0250 12.390
03/27/92 0.0700 0.0000 12.210
06/26/92 0.0700 0.0000 12.310
09/25/92 0.0700 0.0000 11.800
12/28/92 0.0230 0.1050 11.570
03/26/93 0.0500 0.0000 12.220
06/25/93 0.0500 0.0000 12.830
09/24/93 0.0500 0.0000 13.900
12/23/93 0.0500 0.4810 15.260
03/25/94 0.1000 0.0000 15.030
06/24/94 0.1000 0.0000 14.580
09/23/94 0.1000 0.0000 15.280
Class C Shares
12/23/93 0.0490 0.4810 15.250
03/25/94 0.0820 0.0000 15.000
06/24/94 0.0790 0.0000 14.550
09/23/94 0.0790 0.0000 15.240
1. Average Annual Total Returns for the Periods Ended 09/30/94:
The formula for calculating average annual total return is as follows:
1 ERV n
--------------- = n (---) - 1 = average annual total return
number of years P
Where: ERV = ending redeemable value of a hypothetical $1,000 payment
made at the beginning of the period
P = hypothetical initial investment of $1,000
Oppenheimer Global Growth & Income Fund
Page 2
October 6, 1995
1. Average Annual Total Returns for the Periods Ended 09/30/94 (Continued):
Class A Shares
Examples, assuming a maximum sales charge of 5.75%:
One Year Inception
$1,074.08 1 $1,426.51 .2539
(---------) - 1 = 7.41% (---------) - 1 = 9.44%
$1,000 $1,000
Class C Shares
Example assuming a maximum contingent deferred sales charge of 1.00% for the
first year:
Inception
$1,064.14 1.2031
(---------) - 1 = 7.77%
$1,000
Examples at NAV:
Class A Shares
One Year Inception
$1,139.61 1 $1,513.53 .2539
(-------) - 1 = 13.96% (---------) - 1 = 11.10%
$1,000 $1,000
Class C Shares
Inception
$1,074.14 1.2031
(-------) - 1 = 8.99%
$1,000
Oppenheimer Global Growth & Income Fund
Page 2
October 6, 1995
2. Cumulative Total Returns for the Periods Ended 9/30/94:
The formula for calculating cumulative total return is as follows:
ERV - P
------- = Cumulative Total Return
P
Class A Shares
Examples, assuming a maximum sales charge of 5.75%:
One Year Inception
$1,074.08 - $1,000 $1,426.51 - $1,000
------------------ = 7.41% ------------------ = 42.65%
$1,000 $1,000
Class C Shares
Example assuming a maximum contingent deferred sales charge of 1.00% for
the first year:
Inception
$1,064.14 - $1,000
------------------ = 6.41%
$1,000
Examples at NAV:
Class A Shares
One Year Inception
$1,13961 - $1,000 $1,513.53 - $1,000
------------------ = 13.96% ------------------ = 51.35%
$1,000 $1,000
Class C Shares
Inception
$1,074.14 - $1,000
------------------ = 7.41%
$1,000
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