<PAGE>
QUEST FOR VALUE/SM/
GLOBAL FUNDS
July 24, 1995
Dear Shareholder:
It was recently announced that Quest for Value Advisors and Oppenheimer
Management Corporation are discussing a transaction that would involve the two
Quest for Value Global Funds. Oppenheimer Management Corporation and its
affiliates manage funds with assets of more than $35 billion, held in more than
2.4 million shareholder accounts. Although at one time Oppenheimer Management
Corporation was affiliated with Oppenheimer Capital, the parent of Quest for
Value Advisors, that is not currently the case.
Under the proposed transaction, the Quest for Value Global Equity Fund would
enter into an Investment Advisory Agreement with Oppenheimer Management. Quest
for Value Advisors would continue to provide portfolio management services to
the Fund under a Subadvisory Agreement with Oppenheimer Management. Under the
proposal, there would be no change in the Global Equity Fund's portfolio
managers. Pierre Daviron and Richard J. Glasebrook II would continue to manage
the international and domestic portions of the Fund, respectively.
The Quest for Value Global Income Fund would be merged into Oppenheimer
Management's Strategic Income Fund.
The transaction is subject to approval of the funds' shareholders.
Six-Month Results
In this report, we want to bring you up to date on the performance of your
investment in the six months ended May 31, 1995. Both Funds performed well in a
fast-paced global investment environment, with each ranking in the upper portion
of its respective Morningstar category. The Global Equity Fund's Class A shares
provided a total return of 10.2%, while the Global Income Fund's Class A shares
delivered a total return of 8.6%. Detailed information on the performance and
holdings of each Fund is presented in the Investment Review and financial
statements that follow.
We started the Funds in recognition that investors' horizons are no longer
limited to the United States. We view global diversification as a prudent tool
for controlling risk and capitalizing on investment opportunity wherever it may
exist. Both Funds participate in markets worldwide and are managed
conservatively with a goal of preserving your capital and making it grow.
Summary
Intensive research drives our investment process. Our professionals work
together as a team to find investment opportunities that satisfy our strict
value criteria.
Thank you for your support. We remain dedicated to meeting your investment
needs.
Sincerely,
/s/ Joseph M. La Motta
Joseph M. La Motta
President
/SM/ Quest for Value is a registered service mark of Oppenheimer Capital.
- -------------------------------
QUEST FOR VALUE FUNDS
One World Financial
Center
New York, NY 10281
EQUITY FUNDS
- ------------
QUEST FOR VALUE FUND
GLOBAL EQUITY FUND
OPPORTUNITY FUND
SMALL CAPITALIZATION FUND
GROWTH AND INCOME FUND
FIXED INCOME FUNDS
- ------------------
TAXABLE
U.S. GOVERNMENT INCOME FUND
INVESTMENT QUALITY INCOME FUND
GLOBAL INCOME FUND
TAX-EXEMPT
NATIONAL TAX-EXEMPT FUND
CALIFORNIA TAX-EXEMPT FUND
NEW YORK TAX-EXEMPT FUND
MONEY MARKET FUNDS
- ------------------
QUEST CASH RESERVES:
TAXABLE
PRIMARY PORTFOLIO
GOVERNMENT PORTFOLIO
TAX-EXEMPT
GENERAL MUNICIPAL PORTFOLIO
CALIFORNIA MUNICIPAL PORTFOLIO
NEW YORK MUNICIPAL PORTFOLIO
FOR MORE INFORMATION
OR ASSISTANCE
WITH YOUR ACCOUNT
PLEASE CALL:
1-800-232-3863
- --------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Investment Review
- --------------------------------------------------------------------------------
Global Equity Fund
Objective
Seeks long-term growth by investing in a diversified portfolio of high-quality
foreign and domestic stocks.
Six-Month Review
Being a U.S.-based investor in global equities was quite rewarding in the six
months ended May 31, 1995. While the total return of Morgan Stanley
International's World Stock Index was only 4.1% in local currencies, because of
currency adjustments the index delivered a total return of 10.2% in U.S.
dollars.
The Global Equity Fund's Class A shares matched the index, providing a total
return of 10.2% in the six months, well in excess of the 4.3% average return of
the 153 world stock funds monitored by Morningstar, a leading independent
reporter of mutual fund information. The Fund was one of the top performers in
this Morningstar category.
In managing the Fund, we seek to buy companies that generate high cash flow and
use it to increase shareholder value--and we want to buy these companies at
reasonable prices. This combination of high returns and reasonable market
valuations provides opportunity for investment profit. Because of our
disciplined value approach, we believe the Fund offers a relatively low-risk way
to participate in global markets.
With markets in some nations up significantly in the past year and with
economies in a number of industrial countries turning sluggish, we have adopted
a more cautious stance and increased cash reserves. The composition of the
portfolio as of May 31, 1995 was 45.6% international equities and international
securities convertible into equities, 35.3% U.S. equities and 19.1% foreign and
domestic cash and cash equivalents.
Strong crosscurrents swept through the global investment marketplace during the
six months, as the world's two largest stock markets--the U.S. and Japan--
traveled opposite paths. The U.S. market rose 19.2%, as measured by the Standard
& Poor's 500 Index including dividends. Key factors included the slowing of the
U.S. economy, helping to alleviate investor concerns that a new round of
inflation might lie around the corner, and more recently the downturn of
interest rates following nearly 12 months of persistent increases. On the other
hand, the Japanese market plunged 16.7% in yen, although for U.S. investors this
decline was softened by the yen's strength relative to the dollar. In dollar
terms, the Japanese market was down only 2.6%. The Japanese market's tumble
reflected investor concerns as to the balance sheet problems of Japanese banks
and insurance companies as well as a negative outlook for Japanese corporate
profits.
Among other major global markets, prices in most European markets--including
Germany, the U.K. and France--were flat to higher in the six months, while
prices in most Latin American markets fell sharply in the wake of the Mexican
currency crisis. We remain cautious about Latin American equity markets at this
time. Our sole investment in this region as of May 31, 1995 was a small position
in Argentina.
We made two major strategic moves during the six months. First, in February,
because we could no longer find value in Japan at a time of high price-earnings
ratios and sagging profits, we reduced drastically the Fund's holdings of
Japanese securities. Versus a peak of nearly 20% of the Fund's assets early in
the six-month period, by late March we had pared the Fund's Japanese holdings to
just 2.7% of assets. Subsequently, we returned cautiously to the Japanese
market, increasing holdings slightly to 3.9% of assets at May 31, 1995.
Our second major move was to reestablish a position in the Pacific Basin outside
of Japan, in such countries as South Korea, Malaysia, Singapore and Taiwan where
we find good value. Investments in Pacific Basin countries, apart from Japan,
accounted for 10.2% of the Fund's assets on May 31, 1995, about equal to the
weighting of these markets in the Morgan World Index.
We continued to deploy a substantial portion of the Fund's assets in Europe,
where we have an array of diversified holdings in such countries as Austria,
Finland, France, Germany, the Netherlands, Spain, Sweden, Switzerland and the
United Kingdom. European investments represented 31.1% of the Fund's assets as
of May 31, 1995, essentially matching the European weighting of the Morgan
Index.
2
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The U.S. portion of the portfolio delivered a strong performance in the six
months, driven in large measure by the Fund's large holdings of financial
services stocks, one of the U.S. market's strongest sectors during the period.
Also contributing to performance were McDonnell Douglas Corp. and Intel Corp.,
both of which were up sharply in price.
Portfolio Holdings
The Fund's diversified portfolio contained holdings of 88 stocks in 22 countries
as of May 31, 1995, with its biggest positions in the United States, Sweden, the
United Kingdom, Japan and the Netherlands. The Fund's largest foreign equity
holdings were:
Oy Nokia AB
Finnish manufacturer of equipment for cellular telephones
SAP AG
German-based software design and development company
Jardine Strategic Holdings Ltd.
Singapore holding company
Argyll Group PLC
U.K. food retailer
Holderbank Financiere Glars AG
Swiss-based global leader in cement production
The Fund's largest U.S. equity holdings as of May 31, 1995 were:
McDonnell Douglas Corp.
Largest manufacturer of military aircraft and an important competitor in
commercial aircraft
Mellon Bank Corp.
Major money center bank
Federal Home Loan Mortgage Corp. (Freddie Mac)
The second largest insurer of home mortgages
Wells Fargo & Co.
Leading West Coast bank
Intel Corp.
Major producer of computer chips
3
<PAGE>
- --------------------------------------------------------------------------------
Investment Review (continued)
- --------------------------------------------------------------------------------
Global Income Fund
Objective
Seeks to produce a high level of monthly income by investing in a mix of U.S.
and foreign debt securities issued by governments, supranationals (government
agencies) and high-quality corporations. In addition, the Fund strives to
preserve capital by holding a diversified portfolio of securities and hedging
currencies.
Six-Month Review
The Global Income Fund's Class A shares provided a total return of 8.6% in the
six months ended May 31, 1995, compared with an average total return of 8.2% for
the 135 world bond funds monitored by Morningstar and a total return of 10.2%
for the Salomon Brothers Hedged World Government Bond Index. Dividends were $.31
per Class A share in the six months, representing an annualized distribution
yield of 7.0% based on the May 31, 1995 net asset value.
The six-month period was a time of significant recovery for most major fixed
income markets. Prices of U.S. fixed income securities turned upward beginning
in November 1994, following a nearly year-long decline. The Federal Reserve
helped support this turnaround by signaling that it was near the end of its long
series of rate increases. Other major fixed income markets, including Japan and
Germany, followed suit by January. On the other hand, many emerging markets,
especially those in Latin America, fell sharply in the wake of the Mexican
currency crisis in January, then rebounded beginning in March.
In managing the Fund, we seek to increase returns by searching for favorable
yields around the world, but will not take undue risk to capture those yields.
During the first half of the six-month period, we increased the Fund's holdings
in core European markets, including Germany, France and Denmark, and reduced its
position in emerging markets. Later, we reentered the emerging markets through
investments in Argentina and Brazil. As of May 31, 1995, the Fund's assets were
allocated 27.2% to Western Europe, 27.1% to the Pacific Rim (investments in
Australia, the Philippines and New Zealand), 26.3% to the United States, 9.2% to
South America, 7.4% to South Africa and 2.8% to Eastern Europe.
The Fund's portfolio included issues denominated in nine different currencies,
with its largest holdings in United States dollars, German marks, Danish kroner,
New Zealand dollars and Australian dollars. The Fund makes extensive use of
currency hedging techniques. Although such techniques can reduce the Fund's
returns during periods when the U.S. dollar declines in value, over time they
help control risk by smoothing out the impact of currency fluctuations. As of
May 31, 1995, approximately 34% of the Fund's foreign currency exposure was
hedged.
The average weighted maturity of the fixed income securities in the Fund was 7.7
years at the end of the six-month period.
4
<PAGE>
May 31, 1995
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Global Equity Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
- --------------------------------------------------------------------------------
<S> <C>
COMMON STOCKS--79.4%
ARGENTINA--0.3%
- --------------------------------------------------------------------------------
Tobacco/Beverages/Food Products
30,000 Quilmes Industrial SA ADR................. $ 622,500
------------
AUSTRALIA--2.9%
- --------------------------------------------------------------------------------
Metals/Mining--1.7%
405,000 Comalco Ltd............................... 1,500,970
280,000 Western Mining Corp.
Holdings Ltd........................... 1,490,196
------------
2,991,166
------------
Oil/Gas--0.8%
1,075,000 Novus Petroleum Ltd....................... 1,374,344
------------
Tobacco/Beverages/Food Products--0.4%
795,000 Foster's Brewing Group Ltd................ 702,327
------------
Total Australian Common Stocks................................. 5,067,837
------------
AUSTRIA--2.0%
- --------------------------------------------------------------------------------
Building & Construction--1.6%
35,000 Flughafen Wien AG......................... 1,736,877
2,800 Wienerberger
Baustoffindustrie AG................... 1,048,467
------------
2,785,344
------------
Electronics--0.4%
5,000 Austria Mikro Systeme
International AG....................... 654,789
------------
Total Austrian Common Stocks................................... 3,440,133
------------
BELGIUM--0.7%
- --------------------------------------------------------------------------------
Conglomerates
4,400 Colruyt SA................................ 1,180,516
------------
DENMARK--1.0%
- --------------------------------------------------------------------------------
Telecommunications
31,200 Tele Danmark AS (Class B)................. 1,769,451
------------
FINLAND--2.6%
- --------------------------------------------------------------------------------
Retail--0.8%
30,700 Oy Stockmann AB........................... 1,382,244
------------
Telecommunications--1.8%
68,000 Oy Nokia AB............................... $ 3,108,751
------------
Total Finnish Common Stocks.................................... 4,490,995
------------
FRANCE--3.7%
- --------------------------------------------------------------------------------
Machinery & Engineering--0.7%
15,300 Schneider SA.............................. 1,202,660
------------
Oil/Gas--1.7%
38,340 Elf Aquitaine, Inc. ADR................... 1,504,845
24,710 Total SA.................................. 1,531,955
------------
3,036,800
------------
Rubber Products--0.8%
30,000 Michelin (CGDE)........................... 1,368,336
------------
Utilities--0.5%
7,200 Compagnie Generale des
Eaux................................... 798,146
------------
Total French Common Stocks..................................... 6,405,942
------------
GERMANY--3.1%
- --------------------------------------------------------------------------------
Banking--0.6%
2,200 Deutsche Bank AG.......................... 1,077,196
------------
Computer Services--1.5%
2,000 SAP AG.................................... 2,504,776
------------
Drugs & Medical Products--1.0%
2,500 Schering AG............................... 1,737,069
------------
Total German Common Stocks..................................... 5,319,041
------------
HONG KONG--0.8%
- --------------------------------------------------------------------------------
Real Estate
675,000 Hong Kong Land Holdings
Ltd.................................... 1,397,250
------------
INDONESIA--0.5%
- --------------------------------------------------------------------------------
Agriculture
733,000 PT Bakrie Sumatra
Plantations............................ 839,501
------------
ITALY--1.5%
- --------------------------------------------------------------------------------
Telecommunications--0.8%
690,000 Telecom Italia............................ 1,408,163
------------
Textiles--0.7%
170,000 Marzotto & Figli.......................... 1,134,024
------------
Total Italian Common Stocks.................................... 2,542,187
------------
</TABLE>
5
<PAGE>
May 31, 1995
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Global Equity Fund (cont'd)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
- --------------------------------------------------------------------------------
<S> <C>
JAPAN--3.4%
- --------------------------------------------------------------------------------
Casinos/Gaming--0.2%
16,000 Heiwa Corp................................ $ 381,920
------------
Electronics--1.1%
24,000 Kyocera Corp.............................. 1,823,575
------------
Healthcare Services--0.9%
120,000 SRL, Inc.................................. 1,630,724
------------
Insurance--0.2%
80,000 Fuji Fire & Marine
Insurance.............................. 432,024
------------
Jewelry--0.0%
8,000 Nagahori Corp............................. 57,666
------------
Machinery & Engineering--0.4%
21,000 Aoki Marine Co., Ltd...................... 177,430
32,000 Kyudenko Co., Ltd......................... 431,078
------------
608,508
------------
Merchandising--0.3%
36,000 Mutow Co.................................. 329,690
30,000 Simree Co., Ltd........................... 136,484
------------
466,174
------------
Security/Investigation--0.3%
52,000 Toyo Tec Co., Ltd......................... 546,883
------------
Total Japanese Common Stocks................................... 5,947,474
------------
MALAYSIA--2.5%
- --------------------------------------------------------------------------------
Conglomerates--2.1%
690,000 Boustead Holdings Bhd..................... 1,343,883
800,000 Renong Bhd................................ 1,480,219
255,000 Technology Resources
Industries Bhd.......................... 832,928
------------
3,657,030
------------
Paper Products--0.4%
250,000 Aokam Perdana Bhd......................... 674,579
------------
Total Malaysian Common Stocks.................................. 4,331,609
------------
NETHERLANDS--3.8%
- --------------------------------------------------------------------------------
Building & Construction--0.7%
19,500 Kondor Wessels Groep NV................... 581,869
46,000 NBM-Amstelland NV......................... 578,708
------------
1,160,577
------------
Computer Services--0.7%
28,417 Getronics NV.............................. $ 1,228,844
------------
Importing/Exporting--0.7%
29,580 Hagemeyer NV.............................. 1,280,965
------------
Miscellaneous Financial Services--0.7%
22,550 International Nederlanden
Groep.................................. 1,221,732
------------
Publishing--1.0%
20,294 Wolters Kluwer............................ 1,699,934
------------
Total Netherlands Common Stocks................................ 6,592,052
------------
SINGAPORE--1.4%
- --------------------------------------------------------------------------------
Conglomerates
685,937 Jardine Strategic Holdings
Ltd.................................... 2,400,779
------------
SOUTH KOREA--0.4%
- --------------------------------------------------------------------------------
Metals/Mining
25,500 Pohang Iron & Steel Co.,
Ltd. ADR............................... 720,375
------------
SPAIN--2.0%
- --------------------------------------------------------------------------------
Building & Construction--1.0%
17,000 Fomento de Construcciones y
Contratas SA........................... 1,701,041
------------
Oil/Gas--0.4%
20,000 Repsol SA................................. 646,927
------------
Utilities--0.6%
200,000 Compania Sevillana de
Electricidad........................... 1,137,023
------------
Total Spanish Common Stocks.................................... 3,484,991
------------
SWEDEN--4.7%
- --------------------------------------------------------------------------------
Conglomerates--1.0%
20,000 ASEA AB................................... 1,698,242
------------
Drugs & Medical Products--1.0%
60,000 ASTRA AB.................................. 1,758,212
------------
Machinery & Engineering--1.9%
125,000 Atlas Copco AB............................ 1,822,952
103,400 Kalmar Industries AB...................... 1,465,667
------------
3,288,619
------------
Paper Products--0.8%
63,000 AssiDoman AB.............................. 1,408,205
------------
Total Swedish Common Stocks.................................... 8,153,278
------------
</TABLE>
6
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
- --------------------------------------------------------------------------------
<S> <C>
SWITZERLAND--1.9%
- --------------------------------------------------------------------------------
Banking--0.9%
2,900 Bil GT Gruppe AG.......................... $ 1,516,502
------------
Building & Construction--1.0%
2,357 Holderbank Financiere
Glaris AG.............................. 1,875,093
------------
Total Swiss Common Stocks...................................... 3,391,595
------------
TAIWAN--0.8%
- --------------------------------------------------------------------------------
Other
15,000 Taipei Fund Units IDR..................... 1,322,250
------------
UNITED KINGDOM--4.1%
- --------------------------------------------------------------------------------
Building & Construction--0.8%
250,000 Wolseley PLC.............................. 1,457,043
------------
Retail--1.1%
355,000 Argyll Group PLC.......................... 1,882,960
76,000 Booker PLC................................ 517,167
------------
2,400,127
------------
Textiles--0.3%
450,000 Readicut International PLC................ 460,934
------------
Tobacco/Beverages/Food Products--1.0%
221,000 Guinness PLC.............................. 1,681,102
------------
Utilities--0.6%
70,000 London Electricity PLC.................... 717,008
35,000 Midlands Electricity PLC.................. 355,725
------------
1,072,733
------------
Total United Kingdom Common Stocks............................. 7,071,939
------------
UNITED STATES--35.3%
- --------------------------------------------------------------------------------
Aerospace--5.6%
25,000 Lockheed Martin Corp...................... 1,487,500
105,000 McDonnell Douglas Corp.................... 7,586,250
10,000 Sundstrand Corp........................... 555,000
------------
9,628,750
------------
Banking--6.6%
169,215 Mellon Bank Corp.......................... 7,233,941
23,000 Wells Fargo & Co.......................... 4,232,000
------------
11,465,941
------------
Chemicals--2.6%
63,000 Hercules, Inc............................. $ 3,307,500
15,000 Monsanto Co............................... 1,248,750
------------
4,556,250
------------
Conglomerates--0.5%
8,000 ITT Corp.................................. 895,000
------------
Consumer Products--0.2%
10,000 Reebok International Ltd.................. 335,000
------------
Drugs & Medical Products--2.5%
33,000 Becton Dickinson & Co..................... 1,897,500
30,000 Warner-Lambert Co......................... 2,486,250
------------
4,383,750
------------
Electronics--2.3%
35,000 Intel Corp................................ 3,928,750
------------
Insurance--4.0%
70,000 EXEL Ltd.................................. 3,272,500
61,000 Transamerica Corp......................... 3,644,750
------------
6,917,250
------------
Metals/Mining--1.3%
25,937 Freeport McMoRan Copper
& Gold (Class A)....................... 531,708
100,000 Freeport McMoRan, Inc..................... 1,725,000
------------
2,256,708
------------
Miscellaneous Financial Services--5.5%
100,000 American Express Co....................... 3,562,500
87,000 Federal Home Loan
Mortgage Corp.......................... 5,926,875
------------
9,489,375
------------
Oil/Gas--1.5%
25,000 MAPCO, Inc................................ 1,471,875
25,000 Tenneco, Inc.............................. 1,200,000
------------
2,671,875
------------
Paper Products--0.8%
30,000 Champion International
Corp................................... 1,391,250
------------
Telecommunications--1.0%
50,000 Sprint Corp............................... 1,675,000
------------
Textiles--0.9%
100,000 Shaw Industries, Inc...................... 1,587,500
------------
Total United States Common Stocks.............................. 61,182,399
------------
Total Common Stocks
(cost--$109,752,675)........................................... $137,674,094
------------
</TABLE>
7
<PAGE>
May 31, 1995
- --------------------------------------------------------------------------------
Schedules of Investments (unaudited) (continued)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Global Equity Fund (cont'd)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
- --------------------------------------------------------------------------------
<S> <C>
PREFERRED STOCK--0.9%
SOUTH KOREA
- --------------------------------------------------------------------------------
Electronics
19,000 Samsung Electronics Co.
(cost--$1,609,426)..................... $ 1,514,284
------------
<CAPTION>
- --------------------------------------------------------------------------------
Warrants Value
- --------------------------------------------------------------------------------
WARRANTS--0.1%
SINGAPORE
- --------------------------------------------------------------------------------
Conglomerates
218,437 Jardine Strategic Holdings
Ltd. 5/02/98, strike @
HKD 3.57*.............................. $ 110,311
------------
<CAPTION>
- --------------------------------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------------------------------
<S> <C>
CONVERTIBLE BOND--0.5%
JAPAN
- --------------------------------------------------------------------------------
Drugs & Medical Products
80,000,000 JPY Yamanouchi Pharmaceutical
1.25%, 3/31/14
(cost--$945,864)....................... $ 939,439
------------
REPURCHASE AGREEMENT--19.1%
- --------------------------------------------------------------------------------
33,125,000 US$ J.P. Morgan, 6.05%, 6/01/95,
(proceeds at maturity:
$33,130,567, collateralized
by $33,085,000 par,
$33,788,056 value, U.S.
Treasury Notes 7.25%,
11/15/96)
(cost--$33,125,000).................... $ 33,125,000
------------
Total Investments
(cost--$145,432,965)............................ 100.0% $173,363,128
Other Liabilities in Excess of
Other Assets.................................... (0.0) (46,299)
----- ------------
Total Net Assets.................................. 100.0% $173,316,829
===== ============
</TABLE>
* Non-income producing security.
8
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Global Income Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------------------------------
<S> <C>
AUSTRALIA--5.4%
- --------------------------------------------------------------------------------
Corporate Notes
250,000 A$ New South Wales Treasury Corp.
12.00%, 12/01/01 (A)................... $ 208,233
250,000 Queensland Treasury Corp.
8.00%, 5/14/03......................... 169,412
------------
Total Australia 377,645
------------
CZECH REPUBLIC--2.8%
- --------------------------------------------------------------------------------
Time Deposit
5,046,642 CZK ING Bank-Prague
9.50%, 6/14/95......................... 192,253
------------
DENMARK--7.7%
- --------------------------------------------------------------------------------
Government Note
3,000,000 DKK Kingdom of Denmark
8.00%, 3/15/06 (A)..................... 535,912
------------
FINLAND--3.5%
- --------------------------------------------------------------------------------
Government Note
1,000,000 FIN Government of Finland
9.50%, 3/15/04......................... 244,699
------------
FRANCE--2.9%
- --------------------------------------------------------------------------------
Government Note
1,000,000 FRF French Treasury Bond
7.50%, 4/25/05 (A)..................... 202,358
------------
GERMANY--10.2%
- --------------------------------------------------------------------------------
Government Notes
300,000 DM Bundesobligationen
7.00%, 12/22/97........................ 221,694
650,000 Treuhandanstalt
7.50%, 9/09/04 (A)..................... 485,442
------------
Total Germany 707,136
------------
IRELAND--2.9%
- --------------------------------------------------------------------------------
Government Notes
Ireland Treasury Bond (A)
75,000 Iep 8.00%, 10/18/00...................... $ 120,660
50,000 8.00%, 8/18/06....................... 79,507
------------
Total Ireland 200,167
------------
NEW ZEALAND--7.3%
- --------------------------------------------------------------------------------
Government Note
750,000 NZD$ Government of New Zealand
9.00%, 11/15/96........................ 502,933
------------
UNITED STATES--55.9%
- --------------------------------------------------------------------------------
Government Agency--3.4%
235,000 US$ Federal Home Loan Bank
6.10%, 6/01/95......................... 235,000
------------
Government Note--13.2%
900,000 U.S. Treasury Note
6.50%, 5/15/05......................... 913,779
------------
Corporate Note--8.3%
500,000 Healthtrust, Inc
10.25%, 4/15/04........................ 577,500
------------
Euronotes--31.0%
500,000 National Power Corp (Philippines)
7.625%, 11/15/00....................... 472,500
500,000 Philippine Long Distance Telephone
10.625%, 6/02/04....................... 521,250
500,000 Republic of Argentina
5.00%, 3/31/23......................... 250,312
485,000 Republic of Brazil (IDU's)
7.81%, 1/01/01 (B)..................... 389,212
500,000 Republic of South Africa
9.625%, 12/15/99....................... 513,125
------------
2,146,399
------------
Total United States............................................ 3,872,678
------------
Total Investments
(cost--$6,449,128)....................... 98.6% $ 6,835,781
Other Assets in Excess of
Other Liabilities........................ 1.4 95,681
---- ------------
Total Net Assets........................... 100.0% $ 6,931,462
===== ============
</TABLE>
(A) Securities segregated (full or partial) as collateral for open forward
currency contracts. The market value of such segregated securities is
$963,072.
(B) Represents a floating interest rate bond subject to change on the semi-
annual coupon dates, based on the current six month LIBOR rate plus 81.25
basis points.
See accompanying notes to financial statements.
9
<PAGE>
May 31, 1995
- --------------------------------------------------------------------------------
Statements of Assets and Liabilities (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
------------- -------------
Global Equity Global Income
Fund Fund
------------- -------------
<S> <C> <C>
Assets
Investments, at value (cost--$112,307,965 and $6,449,128, respectively)............ $140,238,128 $ 6,835,781
Repurchase agreement (cost -- $33,125,000 and $0, respectively).................... 33,125,000 --
Cash............................................................................... 376,052 2,309
Dividends receivable............................................................... 423,226 --
Receivable for fund shares sold.................................................... 370,465 3,291
Withholding taxes reclaimable...................................................... 83,029 --
Receivable for investments sold.................................................... 17,244 --
Interest receivable................................................................ 7,569 137,959
Deferred organization expenses..................................................... 3,323 42,572
Receivable from adviser............................................................ -- 30,154
Deposits for securities loaned..................................................... 6,021,321 --
Other assets....................................................................... 49,852 51,490
------------ ------------
Total Assets.................................................................... 180,715,209 7,103,556
------------ ------------
Liabilities
Payable for investments purchased.................................................. 1,046,030 --
Payable for fund shares redeemed................................................... 125,877 --
Withholding taxes payable.......................................................... 41,262 --
Distribution fee payable........................................................... 26,989 8,492
Investment advisory fee payable.................................................... 24,770 --
Administration fee payable......................................................... 8,257 7,714
Net unrealized depreciation on forward currency contracts.......................... -- 107,076
Deposits for securities loaned..................................................... 6,021,321 --
Other payables and accrued expenses................................................ 103,874 48,812
------------ ------------
Total Liabilities............................................................... 7,398,380 172,094
------------ ------------
Net Assets
Capital stock...................................................................... 121,697 7,797
Paid-in-surplus.................................................................... 140,564,310 8,901,503
Accumulated net investment income.................................................. 874,828 --
Accumulated net realized gain (loss) on investments................................ 5,330,679 (1,560,467)
Accumulated net realized loss on foreign currency transactions..................... (1,405,075) (698,819)
Distributions in excess of net realized gains...................................... (110,149) --
Net unrealized appreciation (depreciation) on investments and translation of
other assets and liabilities denominated in foreign currencies..................... 27,940,539 281,448
------------ ------------
Total Net Assets................................................................ $173,316,829 $ 6,931,462
============ ============
Class A:
Fund shares outstanding............................................................ 10,897,900 609,877
------------ ------------
Net asset value per share.......................................................... $ 14.26 $ 8.89
============ ============
Maximum offering price per share *................................................. $ 15.09 $ 9.16
============ ============
Class B:
Fund shares outstanding............................................................ 999,259 134,676
------------ ------------
Net asset value and offering price per share....................................... $ 14.12 $ 8.89
============ ============
Class C:
Fund shares outstanding............................................................ 272,523 35,114
------------ ------------
Net asset value and offering price per share....................................... $14.09 $8.89
============ ============
</TABLE>
* Sales charges decrease on purchases of $50,000 or higher for the Global Equity
Fund and $100,000 or higher for the Global Income Fund.
See accompanying notes to financial statements.
10
<PAGE>
Six Months Ended May 31, 1995
- --------------------------------------------------------------------------------
Statements of Operations (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
------------- -------------
Global Equity Global Income
Fund Fund
------------- -------------
<S> <C> <C>
Investment Income
Dividends (net of foreign withholding taxes of $109,638 and $0, respectively)............... $ 1,585,643 $ --
Interest (net of foreign withholding taxes of $0 and $2,759, respectively).................. 800,312 634,383
------------ ------------
Total investment income.................................................................. 2,385,955 634,383
------------ ------------
Operating Expenses
Investment advisory fees (note 2a).......................................................... 606,192 34,607
Distribution fees (note 2c)................................................................. 440,912 22,601
Administration fees (note 2b)............................................................... 202,064 17,304
Transfer and dividend disbursing agent fees (note 1k)....................................... 99,463 15,562
Custodian fees.............................................................................. 96,171 25,358
Auditing, consulting and tax return preparation fees........................................ 28,305 19,019
Registration fees........................................................................... 23,340 15,997
Reports and notices to shareholders......................................................... 19,895 3,839
Amortization of deferred organization expenses (note 1c).................................... 19,536 12,145
Directors' fees and expenses................................................................ 8,581 --
Legal fees.................................................................................. 4,986 5,599
Miscellaneous............................................................................... 5,706 6,284
------------ ------------
Total operating expenses................................................................. 1,555,151 178,315
Less: Investment advisory fees waived and expense
reimbursements (note 2a).............................................................. -- (54,892)
------------ ------------
Net operating expenses................................................................ 1,555,151 123,423
------------ ------------
Net investment income................................................................. 830,804 510,960
------------ ------------
Realized and Unrealized Gain (Loss) on Investments
and Foreign Currency Transactions--Net
Net realized gain (loss) on investments........................................................ 4,663,609 (394,711)
Net realized loss on option transactions....................................................... -- (36,679)
Net realized gain (loss) on foreign currency transactions...................................... (13,439) 290,355
------------ ------------
Net realized gain (loss) on investments, options and foreign currency transactions....... 4,650,170 (141,035)
Net change in unrealized appreciation (depreciation) on investments and
translation of other assets and liabilities denominated in foreign
currencies............................................................................... 10,535,967 509,938
------------ ------------
Net realized gain (loss) and change in unrealized appreciation (depreciation)
on investments and translation of other assets and liabilities denominated
in foreign currencies................................................................. 15,186,137 368,903
------------ ------------
Net increase in net assets resulting from operations........................................... $ 16,016,941 $ 879,863
============ ============
</TABLE>
See accompanying notes to financial statements.
11
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
---------------------------------- --------------------------------
Global Equity Fund Global Income Fund
---------------------------------- --------------------------------
Six Months Year Ended Six Months Year Ended
Ended November 30, Ended November 30,
May 31, 1995* 1994 May 31, 1995* 1994
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Operations
Net investment income..................................... $ 830,804 $ 44,024 $ 510,960 $ 1,275,222
Net realized gain (loss) on investments................... 4,663,609 14,611,225 (431,390) (688,593)
Net realized gain (loss) on foreign currency
transactions............................................ (13,439) (1,391,636) 290,355 (989,174)
Net change in unrealized appreciation
(depreciation) on investments and translation
of other assets and liabilities denominated in
foreign currencies...................................... 10,535,967 (1,833,491) 509,938 (267,788)
------------ ------------ ----------- -----------
Net increase (decrease) in net assets resulting
from operations.................................... 16,016,941 11,430,122 879,863 (670,333)
------------ ------------ ----------- -----------
Dividends and Distributions to Shareholders
Net investment income -- Class A.......................... -- -- (465,412) (179,857)
Net investment income -- Class B.......................... -- -- (37,105) (8,671)
Net investment income -- Class C.......................... -- -- (8,443) (1,531)
Net realized gain -- Class A.............................. (12,834,813) (4,944,320) -- --
Net realized gain -- Class B.............................. (896,581) (66,298) -- --
Net realized gain -- Class C.............................. (212,761) (10,738) -- --
Tax return of capital -- Class A.......................... -- -- -- (1,026,915)
Tax return of capital -- Class B.......................... -- -- -- (49,507)
Tax return of capital -- Class C.......................... -- -- -- (8,741)
------------ ------------ ----------- -----------
Total dividends and distributions to
shareholders....................................... (13,944,155) (5,021,356) (510,960) (1,275,222)
------------ ------------ ----------- -----------
Fund Share Transactions
Class A
Net proceeds from sales................................... 15,571,099 30,817,260 832,213 2,641,672
Reinvestment of dividends and distributions............... 12,377,446 4,682,941 435,635 1,088,618
Cost of shares redeemed................................... (22,289,658) (29,503,784) (12,930,331) (7,582,775)
------------ ------------ ----------- -----------
Net increase (decrease) -- Class A...................... 5,658,887 5,996,417 (11,662,483) (3,852,485)
------------ ------------ ----------- -----------
Class B
Net proceeds from sales................................... 3,386,870 9,192,969 133,594 745,568
Reinvestment of dividends and distributions............... 832,752 64,143 27,577 45,001
Cost of shares redeemed................................... (675,446) (659,275) (189,894) (217,068)
------------ ------------ ----------- -----------
Net increase (decrease) -- Class B...................... 3,544,176 8,597,837 (28,723) 573,501
------------ ------------ ----------- -----------
Class C
Net proceeds from sales................................... 1,440,786 2,476,331 99,544 91,369
Reinvestment of dividends and distributions............... 210,836 10,736 8,141 9,804
Cost of shares redeemed................................... (337,257) (299,932) (30,939) (15,084)
------------ ------------ ----------- -----------
Net increase -- Class C................................. 1,314,365 2,187,135 76,746 86,089
------------ ------------ ----------- -----------
Total increase (decrease) in net assets
from fund share transactions...................... 10,517,428 16,781,389 (11,614,460) (3,192,895)
------------ ------------ ----------- -----------
Total increase (decrease) in net assets................... 12,590,214 23,190,155 (11,245,557) (5,138,450)
Net Assets
Beginning of period....................................... 160,726,615 137,536,460 18,177,019 23,315,469
------------ ------------ ----------- -----------
End of period (including undistributed
net investment income of $874,828,
$44,024, $0 and $0, respectively)....................... $173,316,829 $160,726,615 $ 6,931,462 $18,177,019
============ ============ =========== ===========
</TABLE>
* Unaudited.
See accompanying notes to financial statements.
12
<PAGE>
May 31, 1995
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited)
- --------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies
Quest for Value Global Funds (collectively, the "Funds") are registered
under the Investment Company Act of 1940 as diversified open-end management
investment companies. The Quest for Value Global Equity Fund, Inc. ("Global
Equity") commenced investment operations on July 2, 1990. The Global Income Fund
("Global Income"), a series of Quest for Value Global Funds, Inc., commenced
investment operations on December 2, 1991. Quest for Value Advisors (the
"Adviser") serves as the Funds' investment adviser and administrator. Quest for
Value Distributors (the "Distributor") serves as the Funds' distributor. Both
the Adviser and Distributor are majority-owned (99%) subsidiaries of Oppenheimer
Capital.
Prior to September 1, 1993, the Funds issued only one class of shares which
were redesignated Class A shares. Subsequent to that date, the Funds were
authorized to issue Class A, Class B and Class C shares. Shares of each Class
represent an identical interest in the investment portfolio of their respective
fund and generally have the same rights, but are offered under different sales
charge and distribution fee arrangements. Futhermore, Class B shares will
automatically convert to Class A shares of the same fund eight years after their
respective purchase.
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements:
(a) Valuation of Investments
Investment securities listed on a U.S. or foreign stock exchange and
securities traded in the over-the-counter National Market System are valued at
the last reported sale price on the valuation date; if there are no such sales,
the securities are valued at their last quoted bid price. Other investments
traded over-the-counter and not part of the National Market System are valued at
the last quoted bid price. Investment debt securities (other than short-term
obligations) are valued each day by an independent pricing service (approved by
the Board of Directors) using methods which include current market quotations
from a major market maker in the securities and trader reviewed "matrix" prices.
Short-term debt securities having a remaining maturity of sixty days or less are
valued at amortized cost or amortized value, which approximates market value.
Any security or other asset for which market quotations are not readily
available is valued at its fair value as determined under procedures established
by the Funds' Board of Directors. Investments in countries in which the Funds
may invest may involve certain considerations and risks not typically associated
with domestic investments as a result of, among others, the possibility of
future political and economic developments and the level of governmental
supervision and regulation of foreign securities markets.
(b) Federal Income Taxes
It is the Funds' policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of their taxable income to their shareholders; accordingly, no
Federal income tax provision is required.
(c) Deferred Organization Expenses
Costs incurred by Global Equity and Global Income in connection with their
organization approximated $194,000 and $122,000, respectively. These costs have
been deferred and are being amortized to expense on a straight line basis over
sixty months from commencement of the Funds' operations.
(d) Investment Transactions and Other Income
Investment transactions are accounted for on the trade date. In determining
the gain or loss from the sale of investments, the cost of investments sold is
determined on the basis of identified cost. Dividend income and other
distributions are recorded on the ex-dividend date, except certain dividends or
other distributions from foreign securities which are recorded as soon as the
information is available after the ex-dividend date. Interest income is accrued
as earned. Discounts on debt securities purchased are accreted to interest
income over the lives of the respective securities.
13
<PAGE>
May 31, 1995
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
(e) Dividends and Distributions
Each fund records dividends and distributions to its shareholders on the
ex-dividend date. The following table summarizes the Funds' income dividend and
capital gain declaration policy:
<TABLE>
<CAPTION>
Income Short-Term Long-Term
Dividends Capital Gains Capital Gains
--------- ------------- -------------
<S> <C> <C> <C>
Global Equity.................... annually annually annually
Global Income.................... daily* annually annually
</TABLE>
* paid monthly.
The amount of dividends and distributions from net investment income, net
realized foreign currency gains and net realized capital gains are determined in
accordance with Federal income tax regulations, which may differ from generally
accepted accounting principles. These "book-tax" differences are either
considered temporary or permanent in nature. To the extent these differences are
permanent in nature, such amounts are reclassified within the capital accounts
based on their Federal tax-basis treatment; temporary differences do not require
reclassification. Dividends and distributions which exceed net investment
income, net realized foreign currency gains and net realized capital gains for
financial reporting purposes but not for tax purposes are reported as dividends
in excess of net investment income, dividends in excess of net realized foreign
currency gains or distributions in excess of net realized capital gains,
respectively. To the extent dividends and distributions exceed current and
accumulated earnings and profits for Federal income tax purposes, they are
reported as dividends or distributions of paid-in-surplus or tax return of
capital. Accordingly, permanent book-tax differences relating to shareholder
distributions have been reclassified to paid-in-surplus. Net investment income
(loss), net realized foreign currency gain (loss), net realized capital
gain (loss) and net assets were not affected by this change.
(f) Foreign Currency Translation
The books and records of the Funds are maintained in U.S. dollars as
follows: (1) the foreign currency market value of investment securities, other
assets and liabilities and forward contracts stated in foreign currencies are
translated at the exchange rates at the end of the period; and (2) purchases,
sales, income and expenses are translated at the rate of exchange prevailing on
the respective dates of such transactions. The resultant exchange gains and
losses are included in the Funds' Statements of Operations. Since the net assets
of the Funds are presented at the foreign exchange rates and market prices at
the close of the period, the Funds do not isolate that portion of the results of
operations arising as a result of changes in the exchange rates from
fluctuations arising from changes in the market prices of securities.
(g) Forward Currency Contracts
As part of its investment program, the Funds may utilize forward currency
contracts for hedging purposes. The use of these contracts involves, to varying
degrees, elements of market risk. Risks arise from the possible movements in
foreign exchange rates and security values underlying these instruments. In
addition, credit risk may arise from the potential inability of counterparties
to meet the terms of their contracts. Forward currency contracts are recorded at
market value. Realized gains and losses arising from such transactions are
included in net realized gain or loss on foreign currency transactions in the
results of operations. At May 31, 1995, there were no forward currency contracts
outstanding for Global Equity.
14
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Outstanding contracts at May 31, 1995 for Global Income are as follows:
<TABLE>
<CAPTION>
Settlement Contract to Unrealized
------------------------------------------------
Date Deliver Receive Gain (Loss)
-------- ---------------------- ------------------------ -------------
<S> <C> <C> <C> <C> <C>
06/06/95 AUS 1,500,000 US$ 1,100,400 US$ 23,300
06/06/95 US$ 936,833 AUS 1,284,000 (14,836)
06/06/95 DM 1,000,000 US$ 695,165 (12,892)
06/06/95 US$ 454,790 DM 631,350 (7,758)
06/08/95 FIN 1,940,000 US$ 448,089 104
06/08/95 US$ 456,040 FIN 1,940,000 (8,056)
06/08/95 GBP 410,000 US$ 657,600 6,542
06/08/95 US$ 658,393 GBP 410,000 (7,336)
06/09/95 CHF 850,000 US$ 647,471 (81,711)
06/09/95 US$ 663,301 CHF 850,000 65,881
07/03/95 BEL 20,550,000 US$ 649,905 (59,724)
07/03/95 US$ 660,984 BEL 20,550,000 48,645
07/07/95 CHF 520,000 US$ 461,443 14,407
07/07/95 US$ 465,075 CHF 520,000 (18,039)
07/10/95 ESP 51,270,000 US$ 380,652 (36,547)
07/10/95 US$ 396,765 ESP 51,270,000 20,434
07/24/95 JPY 45,000,000 US$ 551,673 16,059
07/24/95 US$ 521,890 JPY 45,000,000 13,724
08/02/95 DM 1,500,000 US$ 998,336 (65,841)
08/02/95 US$ 1,045,538 DM 1,500,000 18,640
08/10/95 FRF 1,550,000 US$ 293,116 (18,390)
08/10/95 US$ 112,596 FRF 550,000 (2,062)
08/17/95 DKK 792,960 US$ 140,297 (3,169)
09/01/95 IEP 125,000 US$ 204,075 1,549
-------------
US$ (107,076)
=============
</TABLE>
Net unrealized depreciation of $107,076 on these contracts at May 31, 1995
is included in the accompanying financial statements.
(h) Currency Options
When the Funds write a call or a put option on a foreign currency, an
amount equal to the premium received is included in the Funds' Statement of
Assets and Liabilities as an asset and an equivalent liability. The amount of
the liability is subsequently marked-to-market to reflect the current market
value of the option written. If the option expires on its stipulated expiration
date or if the fund enters into a closing purchase transaction, the fund will
realize a gain (or loss if the cost of a closing purchase transaction exceeds
the premium received when the option was written) without regard to any
unrealized gain or loss on the underlying foreign currency, and the liabilty
related to such option will be extinguished. If a call option which the fund has
written is exercised, the fund realizes a gain or loss from the sale of the
underlying foreign currency and the proceeds from such sale are increased by the
premium originally received. If a put option which the fund has written is
exercised, the amount of the premium originally received will reduce the cost of
the foreign currency which the fund purchases upon exercise of the option.
Written options involve elements of market risk in excess of the amount
reflected in the Statement of Assets and Liabilities. The Fund, as a writer of
an option, has no control over whether the option is exercised. The underlying
foreign currency may be purchased (put) or sold (called) and, as a result, the
Fund bears the market risk of an unfavorable change in the value of the foreign
currency underlying the written option. Currency options are traded in the
interbank and over-the-counter markets and counterparty credit risk can exist.
15
<PAGE>
May 31, 1995
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
(i) Repurchase Agreements
The Funds' custodian takes possession of the collateral pledged for
investments in repurchase agreements. The underlying collateral is valued daily
on a mark-to-market basis to ensure that the value, including accrued interest,
is at least equal to the repurchase price. In the event of default of the
obligor to repurchase, the Funds have the right to liquidate the collateral and
apply the proceeds in satisfaction of the obligation. Under certain
circumstances, in the event of default or bankruptcy by the other party to the
agreement, realization and/or retention of the collateral or proceeds may be
subject to legal proceedings.
(j) Security Lending Procedures
Global Equity periodically lends securities through a lending program run
by its custodian, State Street Bank and Trust Company, for its participating
clients. Under the program, the bank makes available to select qualified
brokerage firms or other borrowing institutions the use of the participants
securities for a period of time. Security loans are collateralized with U.S.
Government securities or cash equal to at least 105% of the market value of the
securities at the time of the loan. The securities loaned are marked-to-market
daily and collateral is adjusted daily to reflect any fluctuations in value.
Global Equity earns income from the borrower which is generally the
difference between the interest earned on the collateral and the rebate paid to
the borrower. Global Equity pays State Street Bank and Trust Company 35% of the
net interest earned as a fee for administering the security lending program. For
the six months ended May 31, 1995, Global Equity earned $14,273 from security
lending. At May 31, 1995, Global Equity had the following securities on loan:
<TABLE>
<CAPTION>
Market Value Market Value
Security Shares of Shares Collateral of Collateral
- -------------------------- ------- -------------- ------------ -------------
<S> <C> <C> <C> <C>
Deutsche Bank AG (Germany) 2,152 $1,053,694 U.S. Dollars $1,105,590
Holderbank Financiere
Glaris AG (Switzerland) 1,659 1,319,805 U.S. Dollars 1,385,680
Jardine Strategic
Holdings Ltd. (Singapore) 203,552 712,432 U.S. Dollars 763,320
Jardine Strategic Holdings
Ltd. Warrants (Singapore) 16,552 8,359 U.S. Dollars 8,276
Scheinder SA (France) 14,994 1,178,607 U.S. Dollars 1,237,005
Telecom Italia (Italy) 676,200 1,380,000 U.S. Dollars 1,521,450
------------ -------------
$5,652,897 $6,021,321
============ =============
</TABLE>
(k) Allocation of Expenses
Expenses specifically identifiable to a particular fund or class are borne
by that fund or class. Other expenses are allocated to each fund or class based
on its net assets in relation to the total net assets of all applicable funds or
classes or on another reasonable basis. For the six months ended May 31, 1995,
transfer and dividend disbursing agent fees accrued to Classes A, B and C were
$79,847, $13,666 and $5,950, respectively, for Global Equity and $12,975, $1,535
and $1,052, respectively, for Global Income.
2. Investment Advisory Fee, Administration Fee, Distribution Fee and Other
Transactions with Affiliates
(a) The investment advisory fees are payable monthly to the Adviser and is
computed as a percentage of each fund's net assets as of the close of business
each day at the following annual rates: .75% for Global Equity and .50% for
Global Income. For the six months ended May 31, 1995, the Adviser voluntarily
waived all of its investment advisory fee and reimbursed $20,285 in other
operating expenses for Global Income.
16
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(b) The administration fees are payable monthly to the Adviser and are
computed on each fund's average daily net assets at the annual rate of .25%.
(c) The Funds have adopted a Plan and Agreement of Distribution (the
"Plan") pursuant to which they are permitted to compensate the Distributor in
connection with the distribution of fund shares. Under the Plan, the Distributor
has entered into agreements with securities dealers and other financial
institutions and organizations to obtain various sales-related services in
rendering distribution assistance. To compensate the Distributor for the
services it and other dealers under the Plan provide and for the expenses they
bear under the Plan, the Funds pay the Distributor compensation, accrued daily
and payable monthly, on the daily net assets for Class A shares at the following
annual rates: .25% for Global Equity and .05% for Global Income. The Funds'
Class A shares also pay a service fee at an annual rate of .25%. Although Global
Income's Plan for Class A shares authorizes it to pay a maximum service fee of
.25% and a distribution fee of .05%, the Board of Directors has set a maximum
.25% total fee under the Plan. Compensation for Class B and Class C shares of
each fund is at an annual rate of .75% of average daily net assets. Each fund's
Class B and Class C shares also pay a service fee at the annual rate of .25% of
average daily net assets. Distribution and service fees may be paid by the
Distributor to broker-dealers or others for providing personal service,
maintenance of accounts and ongoing sales or shareholder support functions in
connection with the distribution of fund shares. While payments under the plan
may not exceed the stated percentage of average daily net assets on an annual
basis, the payments are not limited to the amounts actually paid or expenses
actually incurred by the Distributor.
For the six months ended May 31, 1995, distribution and service fees
charged to Classes A, B and C were $367,344, $58,407 and $15,161, respectively,
for Global Equity and $15,538, $5,679 and $1,384, respectively, for Global
Income.
(d) Total brokerage commissions paid by Global Equity during the six months
ended May 31, 1995 amounted to $318,699, of which $8,616 was paid to Oppenheimer
& Co., Inc., an affiliate of the Adviser.
(e) Oppenheimer & Co., Inc. has informed the Funds that it received
approximately $95,000 and $3,000, from Global Equity and Global Income,
respectively, in connection with the sale of Class A shares for the six months
ended May 31, 1995.
(f) The Distributor has informed the funds that it received contingent
deferred sales charges on the redemption of Class C shares of approximately
$1,000 and $150 for Global Equity and Global Income, respectively, for the six
months ended May 31, 1995.
(g) The Distributor has assigned the right to receive the compensation and
contingent deferred sales charge on the Class B shares to a bank in return for
the banks reimbursement to the Distributor of commissions paid by the
Distributor to broker/dealers on Class B shares.
3. Purchases and Sales of Securities
For the six months ended May 31, 1995, purchases and sales of investment
securities, other than short-term securities, were as follows:
<TABLE>
<CAPTION>
Purchases Sales
----------- -----------
<S> <C> <C>
Global Equity ............................ $46,360,050 $61,015,102
Global Income ............................ 11,351,905 23,002,020
</TABLE>
17
<PAGE>
May 31, 1995
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
4. Fund Share Transactions
The following table summarizes the fund share activity for the six
months ended May 31, 1995 and the year ended November 30, 1994:
<TABLE>
<CAPTION>
----------------------------- ------------------------------
Global Equity Fund Global Income Fund
----------------------------- ------------------------------
Six Months Year Ended Six Months Year Ended
Ended May 31, November 30, Ended May 31, November 30,
1995* 1994 1995* 1994
------------- ------------- ------------- ------------
<S> <C> <C> <C> <C>
Class A
Issued......................................... 1,167,015 2,167,814 98,678 290,147
Dividends and distributions reinvested......... 954,313 344,081 51,606 123,568
Redeemed....................................... (1,675,247) (2,079,717) (1,517,104) (837,949)
---------- ---------- ---------- ----------
Net increase (decrease) -- Class A............. 446,081 432,178 (1,366,820) (424,234)
---------- ---------- ---------- ----------
Class B
Issued......................................... 255,704 647,583 15,629 82,174
Dividends and distributions reinvested......... 64,705 4,716 3,250 5,164
Redeemed....................................... (50,821) (46,590) (22,628) (23,568)
---------- ---------- ---------- ----------
Net increase (decrease) -- Class B............. 269,588 605,709 (3,749) 63,770
---------- ---------- ---------- ----------
Class C
Issued......................................... 109,826 174,051 11,872 10,411
Dividends and distributions reinvested......... 16,395 789 957 1,118
Redeemed....................................... (25,503) (21,072) (3,678) (1,720)
---------- ---------- ---------- ----------
Net increase -- Class C........................ 100,718 153,768 9,151 9,809
---------- ---------- ---------- ----------
Total net increase (decrease).................. 816,387 1,191,655 (1,361,418) (350,655)
========== ========== ========== ==========
</TABLE>
5. Dividends and Distributions
The following table summarizes the per share dividends and distributions
made for the six months ended May 31, 1995 and the year ended November 30, 1994:
<TABLE>
<CAPTION>
------------------------------- --------------------------------
Global Equity Fund Global Income Fund
------------------------------- --------------------------------
Six Months Year Ended Six Months Year Ended
Ended May 31, November 30, Ended May 31, November 30,
1995* 1994 1995* 1994
------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
Net investment income:
Class A........................... -- -- $0.309 $0.085
Class B........................... -- -- 0.276 0.075
Class C........................... -- -- 0.260 0.072
Net realized gains:
Class A........................... $1.228 $0.494 -- --
Class B........................... 1.228 0.494 -- --
Class C........................... 1.228 0.494 -- --
Tax return of capital:
Class A........................... -- -- -- 0.485
Class B........................... -- -- -- 0.426
Class C........................... -- -- -- 0.411
</TABLE>
* Unaudited.
18
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
6. Unrealized Appreciation (Depreciation) and Cost of Investments for
Federal Income Tax Purposes
At May 31, 1995, the composition of unrealized appreciation (depreciation)
of investment securities and the cost of investments for Federal income tax
purposes were as follows:
<TABLE>
<CAPTION>
Appreciation (Depreciation) Net Tax Cost
------------ -------------- ----------- ------------
<S> <C> <C> <C> <C>
Global Equity................. $30,808,595 ($3,035,566) $27,773,029 $145,867,629
Global Income................. 391,446 (4,793) 386,653 6,449,128
</TABLE>
7. Authorized Fund Shares and Par Value Per Share
<TABLE>
<CAPTION>
Authorized Par Value
Fund Shares Per Share
----------- ---------
<S> <C> <C>
Global Equity................. 100,000,000 $0.01
Global Income................. 100,000,000 0.01
</TABLE>
19
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights (For a share outstanding throughout each period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INCOME FROM
INVESTMENT OPERATIONS DIVIDENDS AND DISTRIBUTIONS
------------------------------------------------- -----------------------------------------------------
Net Realized Dividends to Distributions to
Net Asset Net and Shareholders Shareholders Tax Total Net Asset
Value, Investment Unrealized Total from from Net from Net Return Dividends Value,
Beginning Income Gain (Loss) Investment Investment Realized Gain of and End of
of Period (Loss) on Investments Operations Income on Investments Capital Distributions Period
Global Equity Fund
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A
Six Months Ended
May 31, 1995 (7) $14.16 $0.07 $1.26 $1.33 $ -- ($1.23) -- ($1.23) $14.26
Year Ended
Nov. 30,
1994 13.54 0.01 1.10 1.11 -- (0.49) -- (0.49) 14.16
1993 12.30 0.00 2.26 2.26 (0.12) (0.90) -- (1.02) 13.54
1992 11.25 0.12 0.93 1.05 -- -- -- -- 12.30
1991 10.57 (0.04) 0.85 0.81 (0.05) (0.08) -- (0.13) 11.25
July 2, 1990 (3)
to Nov. 30, 1990 12.05(4) 0.05 (1.53) (1.48) -- -- -- -- 10.57
Class B
Six Months Ended
May 31, 1995 (7) 14.07 0.04 1.24 1.28 -- (1.23) -- (1.23) 14.12
Year Ended
Nov. 30, 1994 13.52 (0.06) 1.10 1.04 -- (0.49) -- (0.49) 14.07
Sept. 2, 1993 (5)
to Nov. 30, 1993 13.75(4) (0.02) (0.21) (0.23) -- -- -- -- 13.52
Class C
Six Months Ended
May 31, 1995 (7) 14.06 0.03 1.23 1.26 -- (1.23) -- (1.23) 14.09
Year Ended
Nov. 30, 1994 13.52 (0.08) 1.11 1.03 -- (0.49) -- (0.49) 14.06
Sept. 2, 1993 (5)
to Nov. 30, 1993 13.75(4) (0.02) (0.21) (0.23) -- -- -- -- 13.52
<CAPTION>
RATIOS
-----------------------------------------
Ratio of Net Ratio of Net
Net Assets Operating Investment
End of Expenses Income (Loss) Portfolio
Total Period to Average to Average Turnover
Return* (000's) Net Assets Net Assets Rate
<S> <C> <C> <C> <C> <C>
Class A
Six Months Ended
May 31, 1995 (7) 10.24% 155,369 1.87%(1,6) 1.07%(1,6) 34%
Year Ended
Nov. 30,
1994 8.37% 148,044 1.92%(2) 0.05%(2) 70%
1993 19.72% 135,616 1.76%(2) 0.04%(2) 46%
1992 9.33% 111,207 1.76%(2) 0.72%(2) 62%
1991 7.72% 46,937 2.09% (0.27%) 41%
July 2, 1990 (3)
to Nov. 30, 1990 (12.28%) 58,087 2.11%(6) 0.92%(6) 2%
Class B
Six Months Ended
May 31, 1995 (7) 9.93% 14,107 2.44%(1,2,6) 0.58%(1,2,6) 34%
Year Ended
Nov. 30, 1994 7.84% 10,268 2.50%(2) (0.44%)(2) 70%
Sept. 2, 1993 (5)
to Nov. 30, 1993 (1.67%) 1,676 2.26%(2,6) (0.76%)(2,6) 46%
Class C
Six Months Ended
May 31, 1995 (7) 9.78% 3,841 2.53%(1,2,6) (0.54%)(1,2,6) 34%
Year Ended
Nov. 30, 1994 7.77% 2,415 2.66%(2) (0.59%) (2) 70%
Sept. 2, 1993 (5)
to Nov. 30, 1993 (1.67%) 244 2.26%(2,6) (0.69%)(2,6) 46%
</TABLE>
(1) Average net assets for the six months ended May 31, 1995 for Class A, Class
B and Class C were $147,341,261, $11,713,425 and $3,040,585, respectively.
(2) During the periods noted above, the Adviser voluntarily waived a portion of
its fees. If such waivers had not been in effect, the ratios of net
operating expenses to average net assets and the ratios of net investment
income (loss) to average net assets for Class A would have been 1.93% and
0.04%, respectively, for the year ended November 30, 1994, 1.91% and
(0.11%), respectively, for the year ended November 30, 1993 and 1.84% and
0.64%, respectively, for the year ended November 30, 1992. The ratios of net
operating expenses to average net assets and the ratios of net investment
income (loss) to average net assets would have been 2.51% and (0.45%),
respectively, for Class B and 2.66% and (0.59%), respectively, for Class C,
for the year ended November 30, 1994 and 2.32% and (0.82%), annualized,
respectively, for Class B and 2.35% and (0.78%), annualized, respectively,
for Class C, for the period September 2, 1993 (initial offering) to November
30, 1993.
(3) Commencement of operations.
(4) Initial offering price.
(5) Initial offering of Class B and Class C shares.
(6) Annualized.
(7) Unaudited.
- ---------------
* Assumes reinvestment of all dividends and distributions, but does not reflect
deductions for sales charges. Aggregate (not annualized) total return is shown
for any period shorter than one year.
20
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INCOME FROM
INVESTMENT OPERATIONS DIVIDENDS AND DISTRIBUTIONS
------------------------------------------------- -----------------------------------------------------
Net Realized Dividends to Distributions to
Net Asset Net and Shareholders Shareholders Tax Total Net Asset
Value, Investment Unrealized Total from from Net from Net Return Dividends Value,
Beginning Income Gain (Loss) Investment Investment Realized Gain of and End of
of Period (Loss) on Investments Operations Income on Investments Capital Distributions Period
Global Income Fund
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A
Six Months Ended
May 31, 1995 (7) $8.49 $0.31 $0.40 $0.71 ($0.31) -- $ -- ($0.31) $8.89
Year Ended
Nov. 30,
1994 9.36 0.57 (0.87) (0.30) (0.08) -- (0.49) (0.57) 8.49
1993 9.14 0.63 0.27 0.90 (0.17) -- (0.51) (0.68) 9.36
Dec. 2, 1991(3)
to Nov. 30, 1990 10.00(4) 0.77 (1.00) (0.23) (0.63) -- -- (0.63) 9.14
Class B
Six Months Ended
May 31, 1995(7) 8.49 0.28 0.40 0.68 (0.28) -- -- (0.28) 8.89
Year Ended
Nov. 30, 1994 9.36 0.50 (0.87) (0.37) (0.07) -- (0.43) (0.50) 8.49
Sept. 2, 1993(5)
to Nov. 30, 1993 9.42(4) 0.12 (0.06) 0.06 (0.03) -- (0.09) (0.12) 9.36
Class C
Six Months Ended
May 31, 1995(7) 8.49 0.26 0.40 0.66 (0.26) -- -- (0.26) 8.89
Year Ended
Nov. 30, 1994 9.36 0.48 (0.87) (0.39) (0.07) -- (0.41) (0.48) 8.49
Sept. 2, 1993 (5)
to Nov. 30, 1993 9.42(4) 0.13 (0.06) 0.07 (0.03) -- (0.10) (0.13) 9.36
<CAPTION>
RATIOS
-----------------------------------------
Ratio of Net Ratio of Net
Net Assets Operating Investment
End of Expenses Income (Loss) Portfolio
Total Period to Average to Average Turnover
Return* (000's) Net Assets Net Assets Rate
<S> <C> <C> <C> <C> <C>
Class A
Six Months Ended
May 31, 1995 (7) 8.57% 5,422 1.70%(1,2,6) 7.49%(1,2,6) 90%
Year Ended
Nov. 30,
1994 (3.24%) 16,781 1.65%(2) 6.45%(2) 144%
1993 10.20% 22,465 1.70%(2) 6.73%(2) 114%
Dec. 2, 1991(3)
to Nov. 30, 1990 (2.60%) 19,469 1.84%(2,6) 7.93%(2,6) 360%
Class B
Six Months Ended
May 31, 1995(7) 8.17% 1,197 2.44%(1,2,6) 6.53%(1,2,6) 90%
Year Ended
Nov. 30, 1994 (3.99%) 1,176 2.41%(2) 5.71%(2) 144%
Sept. 2, 1993(5)
to Nov. 30, 1993 0.65% 699 2.45%(2,6) 4.38%(2,6) 114%
Class C
Six Months Ended
May 31, 1995(7) 7.96% 312 2.84%(1,2,6) 6.10%(1,2,6) 90%
Year Ended
Nov. 30, 1994 (4.20%) 220 2.70%(2) 5.48%(2) 144%
Sept. 2, 1993 (5)
to Nov. 30, 1993 0.71% 151 2.45%(2,6) 5.16%(2,6) 114%
</TABLE>
(1) Average net assets for the six months ended May 31, 1995 for Classes A, B
and C were $12,464,638, $1,138,777 and $277,617, respectively.
(2) During the periods noted above, the Adviser voluntarily waived all or a
portion of its fees and reimbursed the fund for a portion of its operating
expenses. If such waivers and reimbursements had not been in effect, the
ratios of net operating expenses to average net assets and the ratios of net
investment income to average net assets for Class A would have been 2.48%
and 6.71%, annualized, respectively for the six months ended May 31, 1995,
2.35% and 5.75%, respectively, for the year ended November 30, 1994, 2.09%
and 6.34%, respectively, for the year ended November 30, 1993 and 1.88% and
7.89%, annualized, respectively, for the period December 2, 1991
(commencement of operations) to November 30, 1992. The ratios of net
operating expenses to average net assets and the ratios of net investment
income to average net assets would have been 3.37% and 5.60%, annualized,
respectively, for Class B and 3.80% and 5.14%, annualized, respectively, for
Class C, for the six months ended May 31, 1995, 3.12% and 5.00%,
respectively, for Class B and 3.39% and 4.79%, respectively, for Class C,
for the year ended November 30, 1994 and 2.88% and 3.95%, annualized,
respectively, for Class B and 2.84% and 4.77%, annualized, respectively, for
Class C, for the period September 2, 1993 (initial offering) to November 30,
1993.
(3) Commencement of operations.
(4) Initial offering price.
(5) Initial offering of Class B and Class C shares.
(6) Annualized.
(7) Unaudited.
- ---------------
* Assumes reinvestment of all dividends and distributions, but does not reflect
deductions for sales charges. Aggregate (not annualized) total return is shown
for any period shorter than one year.
21
<PAGE>
[LOGO OF QUEST FOR VALUE APPEARS HERE]
<PAGE>
THE QUEST FOR VALUE FAMILY OF FUNDS
- --------------------------------------------------------------------------------
EQUITY FUNDS
Quest for Value Fund invests primarily in common stocks with an objective of
capital appreciation.
Quest for Value Opportunity Fund seeks capital appreciation by investing through
a mix of stocks, fixed income and money market securities.
Quest for Value Small Capitalization Fund seeks capital appreciation by
investing primarily in undervalued stocks of companies with market
capitalizations under $1 billion.
Quest for Value Global Equity Fund seeks long term growth through a global
investment strategy primarily involving equity securities.
Quest for Value Growth and Income Fund seeks total return by investing in a
combination of stocks, U.S. government securities and investment grade bonds.
FIXED-INCOME FUNDS
Quest for Value Investment Quality Income Fund seeks high monthly income
consistent with conservation of principal through a portfolio of corporate and
U.S. government bonds, 80% of which are rated A or better.
Quest for Value Global Income Fund invests in fixed income securities of
domestic and foreign governments and corporations with an objective of high
monthly income.
Quest for Value U.S. Government Income Fund seeks high current income together
with protection of principal by investing in U.S. government securities.
Quest for Value Tax Exempt Funds are three portfolios investing in investment
grade municipal obligations with the objective of high current income exempt
from federal taxes and, in some cases, state and local income taxes. The three
portfolios are: the National Tax Exempt Fund, the New York Tax Exempt Fund and
the California Tax Exempt Fund.
<PAGE>
QUEST
- --------------------------------------------------------------------------------
QUEST FOR VALUE
GLOBAL FUNDS
- --------------------------------------------------------------------------------
DIRECTORS AND OFFICERS
Joseph M. La Motta Director, President
Paul Y. Clinton Director
Thomas W. Courtney Director
Lacy B. Herrmann Director
George Loft Director
Bernard H. Garil Vice President
Robert J. Bluestone Vice President
Pierre Daviron Vice President
Richard J. Glasebrook, II Vice President
Richard Gluck Vice President
Sheldon Siegel Treasurer
Deborah Kaback Secretary
Leslie Klein Assistant Treasurer
Thomas E. Duggan Assistant Secretary
Maria Camacho Assistant Secretary
INVESTMENT ADVISER
Quest for Value Advisors
One World Financial Center
New York, NY 10281
DISTRIBUTOR
Quest for Value Distributors
Two World Financial Center
New York, NY 10080-6116
TRANSFER AND SHAREHOLDER SERVICING AGENT
State Street Bank and Trust Company
P.O. Box 8505
Boston, MA 02266
CUSTODIAN
State Street Bank and Trust Company
P.O. Box 351
Boston, MA 02101
Table of Contents
President's Letter......................................................... 1
Investment Review.......................................................... 2
Schedules of Investments................................................... 5
Statements of Assets and Liabilities....................................... 10
Statements of Operations................................................... 11
Statements of Changes in Net Assets........................................ 12
Notes to Financial Statements.............................................. 13
Financial Highlights....................................................... 20
This report is authorized for distribution only to shareholders and to others
who have received a copy of the prospectus.
- --------------------------------------------------------------------------------
QUEST FOR VALUE
GLOBAL FUNDS
- --------------------------------------------------------------------------------
GLOBAL EQUITY FUND
GLOBAL INCOME FUND
Semi-Annual
Report
May 31, 1995
[LOGO OF QUEST FOR VALUE APPEARS HERE]
Managed by
Quest for Value Advisors
